ECONOMY

Mixed results for building industry

Private building activity registered a 13.8-percent year-on-year drop in volume (in thousand cubic meters) in September last year, while over the nine-month period growth slowed to 12.6 percent, the National Statistics Service said yesterday. The provisional data again confirmed the deceleration in the Greek economy in the last quarter of the year. The construction sector, which started the year with an 80.5-percent increase in volume, has seen a gradual decline in activity as the Greek economy felt the bite of the global slowdown. Despite this, the cumulative 12.6-percent gain in the year to September showed that construction is holding up well. Private building activity is expected to power ahead this year on the back of cheap mortgage loans – up by a cumulative 35.8 percent in the 10-month period to October, according to Bank of Greece statistics – and Greeks’ traditional preference for investing in real estate. The sector also proved to be the most optimistic regarding future prospects compared with industrialists and retailers, a business sentiments survey by the Foundation for Economic and Industrial Research (IOBE) for December showed. IOBE estimated gross capital goods investments in the construction sector rose by 10.2 percent last year. The level of investments is projected to increase by 11.2 percent this year, as against the average European outlay of 1.7 percent. While the private sector remained buoyant, the same could not be said of public building activity. Public projects were just 2.1 percent of total construction activity in September while over the January-September period, it accounted for just 1.9 percent of the total. The sector, however, is expected to pick up speed as EU-funded projects take on flesh.