Czech Republic: challenging year ahead – report

The Czech Republic construction sector is expected to experience  “challenging” year due to the postponement of major road and rail projects, according to a latest report by PMR Research. As a result, growth is not expected to return until 2013 and 2014.

Civil engineering witnessed a marked slowdown in 2011 due to economic difficulties and budgetary cuts. The revised Czech government strategy on transport infrastructure released in January 2012 suggest the decline may continue this year.

PMR said that a total of 34km of motorways were planned to be delivered in 2012, adding that there were currently no plans for expressway construction to be completed this year. Similarly, rail construction is also expected to see slow development in 2012.

The government’s revised strategy on transport infrastructure construction to 2020 sees only three major railway reconstruction projects being completed in 2012, all of which started in previous years and there are no firm plans for further investments in the future, according to PMR.

However, the non-residential construction is forecast to offset some of these declines as the sector is expected to see some growth this year after a few years of decline. This reflects increased demand for office and logistics space and, to a lesser extent, in the retail sector.

In terms of the cement sector, last year production rose 15 per cent to 3.8Mt while domestic sales were up five per cent to around 3Mt, according to the Czech cement association. However, this rise has been attributed to the launch of a number of delayed construction projects that were held back in 2010 due to adverse weather conditions. Jan Hrozek, chairman of the board of directors of cement producer Ceskomoravsky Cement, earlier this year warned that cement consumption will see a five per cent drop this year, taking consumption back to 2010 levels.