KSH: Construction output down again in August

Three months in a row of contractions may indicate a downward trend that could impact final GDP figures for 2014.

Much of the construction output this year has been in civil engineering, and analysts have said that the growth in government construction orders may slow now that municipal elections are over. In August, the volume of new orders for civil engineering work dropped by 36.5% y.o.y., while contracts for construction of buildings dropped 23.5%. As a result, the total volume of new orders dropped 31.4% year-on-year in August.

According to KSH, despite the fall in new contracts in the last few months, the volume of the stock of orders of construction enterprises at the end of August grew 35.8% y.o.y., The volume of the stock of orders dropped by 11.3% for the construction of buildings, while it grew by 53.0% for civil engineering works y.o.y.

From January to August, output was up by 20.4% as compared to the same period last year. Output was higher in both main groups of constructions in August than a year earlier: by 4.1% more in the construction of buildings and 22.5% higher in civil engineering.

KSH attributes the significant growth  in civil engineering to railway reconstruction and road construction work in several areas of the country, as well as public utility projects. According to seasonally adjusted indices, the construction of buildings increased by 0.8%, while that of civil engineering works rose by 2.5% compared to a month earlier.