The estimated value of works from construction permits climbed nearly five times on annual basis in December compared to 80.1% y/y growth in the previous month, according to data from the stats office released on Monday. We note that the value increased for three consecutive months for the first time since the start of 2018, which indicates that confidence in the sector might have returned towards the end of last year. The sector performed poorly in 2019 with the value growing in only five out of eleven months. Still, the Q4 growth rate was the strongest among all quarters in 2018. We note that the value of construction works was boosted mainly by the civil engineering segment, where the value of works increased by nearly 30 times on annual basis. Still, the value of works from civil engineering work permits is volatile and could be seriously affected by the issuance of permits for major infrastructure projects, which was likely the case in December. On the other hand, the value of permits for buildings increased by slower 14.5% y/y in the month compared to 89.0% y/y growth in November.
The number of building permits increased by 13.6% y/y in the month after growing by stronger 27.5% y/y in November. The largest growth contributor were permits for civil engineering works, which increased by sharp 121.1% y/y. Permits for building and reconstruction works also increased on the year but at slower pace. With regard to the residential market, the planned number of dwellings rose by 58.4% y/y and the useful floor area was up by 48.2% y/y. The construction sector was a main drag on the economy in 2017 and its poor performance also weighed on GDP figures in H1’18, although there were visible signs of improvement towards the end of last year.