Construction output increased by 30.7% y/y in November, slowing from the 38.1% y/y increase in the previous month, the statistical office (KSH) reported. Output growth still remained quite strong and in line with the average performance since the beginning of the year. On a seasonally- and calendar-adjusted basis, construction output contracted by 1.4% m/m but it still remained on a consistent upward trend since the beginning of 2016.
The slowdown in construction activity in November was entirely on account of the civil engineering segment. Civil engineering output moderated to still strong 33.9% y/y growth during the month, which the KSH explained with construction of expressways and railway refurbishment works. We think that the slowdown in civil engineering growth represented just normal fluctuations, stemming from the completion or start of phases in large infrastructure projects. Accordingly, we expect that growth in the segment will remain rather buoyant in the short term, driven by the relatively fast absorption of EU funds.
Building construction growth picked up slightly to 29.1% y/y in November. Construction of industrial buildings contributed to the expansion of the segment, along with construction of residential and education buildings, the KSH said.
New construction orders rose by 11.7% y/y in November, weakening slightly compared to the previous month. The stock of orders was more than two-fold higher y/y at the end of November. New building orders fell by 8.2% y/y while new civil engineering orders rose strongly by 43.4% y/y, representing contracts for road and railway development, the KSH said.