ECONOMY

Construction boom continues unchecked

The construction sector proved itself to be the powerhouse of the economy as the number of permits issued in June to the private sector grew by 15.4 percent year-on-year, according to figures released by the National Statistics Office (ESYE) yesterday. In the six-month period to June, the number of licenses issued increased by 7.7 percent. Noting that the construction sector is the most dynamic sector of the economy, the National Bank of Greece in its October-November economic analysis pointed to the effectiveness of low interest rates and increasing property prices in stimulating demand. NBG said the trend is set to continue as survey data for order book production schedules and the projected months of secured production in building confirm the strength of the construction sector. It pointed to the further easing of monetary conditions and a greater inflow of European Union structural funds toward year-end as other factors expected to sustain the sector. ESYE statistics showed that the bulk of permits – nearly a third of the total – issued in June were in Attica, underlining the spurt of activity brought on by demand for new homes, projects related to the 2004 Olympic Games and industrial expansion. Of the 7,673 licenses issued in that month, state construction activity accounted for only 2.9 percent. In the January-June period, 36,549 permits were handed out, 2.1 percent of which represented state projects. Of the total figure, slightly less than a third were in Attica. While public investment activity has fallen behind the private sector, state projects are expected to pick up toward the end of the year, in particular EU-funded ventures, NBG’s report said. Citing the possibility that Greece could left without a national carrier on the eve of the 2004 Olympic Games, the Association of Greek Tourist Enterprises (SETE) yesterday said the State should take steps to foster demand. One way of doing this is to cut charges at airports countrywide.