Building activity in a slump

Construction activity, the one-time pillar of the Greek economy, crumbled in March, as it posted a 50.8 percent decline from the same month last year. In the first quarter of the year, construction dropped by 21.7 percent in volume, 22.1 percent in the surface covered and 25.3 percent in the number of new building permits, thus continuing the slide that began in December 2006. This is a major warning signal for the entire economy, with investment falling by 6.8 percent in the first quarter, mostly owing to the slump in building activity. In March, the biggest fall was seen in Attica (60.7 percent) and the smallest in the region of the northern Aegean (33.8 percent). Industry professionals suggest that the number of unsold flats is above 300,000 across Greece, and say that a further rise in interest rates and the imposition of a single property tax will exacerbate the situation and put additional pressure on prices.