Of all the country?s economic sectors, construction has been the hardest hit by the financial crisis that Greece has been trying to shake since 2008, particularly as far as unemployment is concerned.
According to the latest six-month report by the Association of Greek Contracting Companies (SATE), half of all those employed in the sector in 2008 have now lost their jobs. During the same period the equivalent proportion in the manufacturing sector has hit one in three and in wholesale and retail commerce, one in five.
In total, since the start of the crisis, some 185,300 jobs have been lost in the construction industry as employment in the sector has been shrinking for 16 consecutive quarters, or four years. The decline in the second quarter of 2012 from the same period in 2011 came to 18.6 percent.
One of the reasons why so many jobs have been lost is the increasing number of companies being deleted from the register of construction enterprises: Since the start of this year, no fewer than 37 firms have exited the market, against 15 in 2010 and 10 in 2011. Since 2004, when the development associated with the Athens Olympics ended, as many as 180 construction firms have shut down, which amounts to 25 percent of the whole sector.
The survival of the remaining companies is also at risk, as 40.2 percent of medium-level companies posted losses in 2011, up from 27.2 percent in 2010. Their total loss in turnover amounted to 52.4 percent in the period from 2009 to 2011. Even among the companies that have not closed down, 18.7 percent are essentially inactive due to lack of business.
One of the main reasons for this negative development is the lack of funds available for the Public Investment Program, which, according to SATE, have declined by 46 percent since 2009. This year the amount is not expected to exceed 5.2 billion euros, the lowest in the last 15 years. In 2009 the Public Investment Program totaled 9.6 billion euros and 6.6 billion last year.
Consequently the construction production index has been shrinking for 14 consecutive quarters, with the decline in the year?s second quarter reaching 29.8 percent on an annual basis, bringing the index to its lowest point since 2000.
On the other hand, one of the very few positive aspects of the SATE report concerns the 42.1 percent increase in the number of new tenders for projects budgeted at a minimum of 2 million euros: In the first half of this year, 206 such projected were auctioned off, with their budget adding up to 1.96 billion euros. This is far higher than the 145 projects totaling 1.49 billion euros in the first half of 2011.
Of course the completion of tenders for the projects does not entail their automatic undertaking by companies, as many contracts require several months before they get signed, which means a delay in payment for construction firms.