Divergence in Construction Sectors
The report highlighted a significant divergence between the two main segments of the construction industry. The construction of buildings experienced a notable decline of 4.2% compared to the same month last year. In contrast, the civil engineering sector demonstrated resilience, registering a growth of 4.3% year-on-year.
However, when dissecting the overall figures, the production volume within specific divisions of construction presents a more complex picture. The construction of buildings saw a sharp decline of 8.7%, while civil engineering production also dropped by 6.8%. On the other hand, specialized construction activities, which hold the largest weight in the industry, grew by 5.4%, partially offsetting the declines in other areas.
Contract Volumes and Producer Prices
The volume of new contracts signed in June 2024 plummeted by 34.9% compared to the high base of the previous year. The construction of buildings suffered a significant contraction, with the volume of contracts falling by 41.6%. Civil engineering contracts also saw a reduction, albeit at a lesser rate of 22.8%.
Despite the downturn in new contracts, the overall stock of contracts at the end of June 2024 was 1.5% higher than in the same period last year. This increase was driven by a 10.9% rise in the volume of contracts for civil engineering works, which offset a 7.9% decrease in contracts for building construction.
In terms of pricing, construction producer prices in the second quarter of 2024 increased by 6.0% compared to the same period in 2023. The civil engineering sector saw the most substantial price hike, with a 7.1% increase, followed by a 6.4% rise in specialized construction activities. The construction of buildings, however, experienced a more modest price increase of 4.6%.
Outlook for the Construction Sector
The first half of 2024 saw a 5.1% growth in construction production compared to the same period in 2023, indicating some resilience in the sector despite the challenges. However, the sharp decline in building construction and the significant drop in new contract volumes could pose concerns for the future stability of the sector.
