Construction output drop observed in Q2 in Latvia

The latest data published August 9 by the Central Statistical Bureau of Latvia (CSB) show that, compared to the second quarter of 2021, in the second quarter of this year construction output reduced by 13.8 % (according to calendar-adjusted data at constant prices). 

Construction output drop was observed in civil engineering – at 16.8 %, specialized construction activities – at 15.5 %, and construction of buildings – at 9.6 %.

The decline in construction output was influenced by a sharp rise in construction costs, which led to lower demand for construction services and termination, revision, or indexation of several construction contracts resulting in extension and postponement of execution deadlines thereof and thus a downturn in construction output during the reporting period. Despite the high construction activity within the country, construction works in separate large construction objects had not yet reached the most resource-intensive stages.

Construction output decline was registered in all groups of the civil engineering division: in the construction of roads and railways at 13.1 %, in construction of utility projects at 20.7 %, and in construction of other civil engineering projects of 33.3 %. Construction of bridges and tunnels was the only class of civil engineering group in which construction output upturn (of 17.3 %) was observed.

Construction output was reduced also in all groups of specialized construction activities: in demolition and site preparation by 46.7 %, in building completion and finishing (plastering, floor and wall covering, painting and glazing, etc.) by 20 %, in electrical, plumbing and other construction installation activities by 11.2 %, and in other specialized construction activities (roofing activities and other specialized construction activities not elsewhere classified) by 12.3 %.

In the first half of 2022, compared to the first half of 2021, construction output fell by 11.7 % (according to calendar-adjusted data at constant prices). in civil engineering, it dropped by 16.5 %, in specialized construction activities by 12.2 %, and in construction of buildings by 8.5 %.

In the second quarter of 2022, compared to the first quarter of 2022, construction output reduced by 5.7% (according to seasonally adjusted data at constant prices). In civil engineering, it declined by 7.4 %, in construction of buildings by 1.6 %, and in specialized construction activities by 4.2 %.

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