Greek construction slump drags on in August

Greece’s construction sector contracted by more than a quarter in August compared with a year earlier, data showed on Thursday, continuing a slump that is deepening the country’s worst peacetime downturn after five years of recession.

Once a key growth driver for Greece’s 215-billion-euro economy, construction activity has been the sector hardest hit by the austerity measures Greece has implemented in return for the international aid that keeps it afloat.

Having fallen behind its deficit targets, the twice bailed-out country has agreed to pile on additional taxes as well as wage and pension cuts that stifle demand for new homes.

Building volume was down 27.5 percent year-on-year in August, Greek statistics service ELSTAT said.

It said 1,210 building permits were issued in August alone, 48.2 percent fewer than in the same month last year. The sector declined a cumulative 27.3 percent in the first nine months of the year, based on the number of building permits.

Almost half of Greece’s construction workers have lost their jobs since 2007, according to ELSTAT.

The spending cuts, together with tighter bank credit, have squeezed household disposable incomes, while a property levy to fill state coffers has also taken its toll.

Construction activity shrank by an annual 12 percent in the first half of the year, leaving the industry on course for a seventh consecutive year of contraction. [Reuters]

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