Czech construction industry has dropped to 17th place among EU countries

Prague – Czech construction was in the first half of this year with a year-on-year growth of 3.4 percent ranked 17th among the 27 countries of the European Union; data from Italy are not available. Year-on-year, the Czech Republic dropped nine places, compared to the end of the first quarter, it was three spots better. This follows from data from the European statistical office Eurostat. In EU countries, construction grew on average by 3.4 percent in the first quarter.

"Although there is high demand for home ownership in the Czech Republic and the backbone transportation network is not completed, Czech construction is growing at only an average pace within the European Union. The cause is poor construction regulations that hinder the construction boom experienced by countries like Hungary or Poland," said analyst Štěpán Křeček to ČTK. He believes that the state should come up with a new ambitious plan to build a highway network between regional cities.

According to analyst Lukáš Kovanda, the key reason for the weaker performance of Czech construction is capacity constraints due to a lack of suitable labor in a time of record low unemployment rates. Additionally, long approval processes complicate the situation. "For example, Hungarians have been building highways in their country at a much faster rate per capita than the Czechs for the past 20 years. The performance of Czech construction will be weaker this year than last. Due to the need to speed up the drawdown of EU funds, however, a slight improvement in the situation can be expected in the coming quarters, even in international comparison," added Kovanda.

In the first half of the year, construction output increased the most in Hungary by 35.2 percent. This was followed by Romania with a 23 percent growth and Malta, where construction rose by nearly a fifth year-on-year. Fifteen countries were above the EU average. The Czech Republic, along with Latvia, was on average. Three countries in the union recorded a decline. In Greece, construction fell by 11.8 percent year-on-year, in Spain by 1.6 percent, and in Slovakia by 0.8 percent.

"Hungary's position has been unattainable in the last two years. It shows strong growth in land development and infrastructure. It is evident that the country can take advantage of opportunities from European funds and is building at an incredible pace. In our case, it is evident that we are not able to draw the funds in time, and the speed of infrastructure construction hardly deserves any comment," added analyst Petr Dufek.

Year-on-year change in construction performance in EU countries in the 1st half of 2019:

Country	Index (in percent)
Hungary	35.2
Romania	23.0
Malta	19.1
Slovenia	14.3
Cyprus	12.8
Lithuania	12.4
Ireland	10.8
Croatia	9.8
Poland	9.2
Austria	7.0
Netherlands	6.8
Sweden	5.7
Bulgaria	4.6
Germany	3.8
Denmark	3.7
Latvia	3.4
Czech Republic	3.4
Portugal	3.0
France	2.9
Estonia	2.6
Finland	1.8
United Kingdom	1.7
Belgium	1.4
Luxembourg	0.6
Slovakia	-0.8
Spain	-1.6
Greece	-11.8
Italy	data not available
EU Average	3.4