The level of private building activity has fallen so much, and continues falling, that the issuing of a building permit alone is enough to affect the development of a region or all of the country, Alpha Bank said in its latest weekly economic bulletin.
Private home building totaled 535 in Greece in May, from 868 in the same month last year, 903 in 2014 and 10,096 in 2007. Private building activity grew 38.3 pct in July 2016, after falling by 26.1 pct in the previous month, Hellenic Statistical Authority said in a report released a few days ago. Building activity in permits grew 36 pct in July, compared with the same month last year, but fell 14.4 pct in the January-July period.
Alpha Bank’s analysts said that in the first five months of 2016 home building totaled 3,286, down from 3,766 in the same period in 2015 and 3,808 in 2014. The production index in the construction sector grew 9.7 pct in the second quarter of 2016, compared with the same period last year, after a 6.3 pct increase recorded in 2015. In the first half, the production index grew 0.3 pct after a 22.3 pct increase in the same period last eyar, with private construction activity down 2.7 pct after a 24.2 pct increase in 2015 and infrstructure project activity down 1.5 pct from a 20.8 pct increase in 2015.
The bulletin noted that according to national account data, the construciton sector accounted only 2.2 pct of the Greek economy’s total added value. Demand from abroad remained subdued, with capital inflows for real estate asset purchases totaling 111.3 million euros in the January-July period, down 0.5 pct from the same period in 2015, after falling by 21.2 pct in the same period last year.
The Foundation for Economic and Industrial Research (IOBE), in a report, said that business expectations in the construction sector fell to 46.6 points in September from 65.6 in August and 37.7 points in August 2015.