The bosses of large construction companies will be looking for solutions to the crisis

Prague - The heads of the largest construction companies in the Czech Republic will today discuss the strategic concept of development for the sector for the years 2014 to 2020. The meeting will also be attended by the current chairman of the ODS Martin Kuba, shadow minister of industry and trade of the ČSSD Milan Urban, MP and former Minister of Transport Zbyněk Stanjura (ODS), chairman of the Association of Regions of the Czech Republic Michal Hašek (ČSSD), and the chairman of the Union of Towns and Municipalities Dan Jiránek. The research company CEEC Research will, among other things, publish the complete version of the current Quarterly Analysis of Czech Construction Q3/2013 during the event.
    From the partial conclusions of the analysis, which ČTK has at its disposal, it follows that the construction delivery prices have decreased on average by 23 percent since the beginning of the crisis in the Czech Republic. Due to intense competition, companies have to subsidize some of their contracts, resulting in negative margins. The analysis understands the implementation price as the price at which the company receives the contract from the client.
    According to 96 percent of the general directors of the ten largest Czech construction companies, the fall in prices mainly affected the companies' margins. "These have significantly decreased compared to the period before the crisis, in some cases falling into the negative, meaning that some companies are subsidizing their contracts," the authors of the analysis state. The reduction of operational and wage costs contributes to covering the difference in construction prices before the crisis and now only to a lesser extent.
    Czech construction has been in crisis for five years now. While in 2008 construction production reached 547.5 billion crowns, the total construction in the last year amounted to 424 billion crowns. Since 2009, Czech construction has cumulatively lost 277 billion crowns. A lack of funds caused the first construction companies to go bankrupt. While in 2008 there were 767 companies operating in the Czech market with more than 50 employees, last year there were only 603. This is also a reason for the dumping prices, which, in turn, benefit investors.