Mihkel Nestor: the construction sector does not want to succumb to economic recession

Mihkel Nestor, SEB economic analyst

Despite the economic recession, high interest rates and the collapse of the Nordic real estate market, the health of the Estonian construction sector has remained surprisingly strong so far. Hopefully, there will be a lot of fun in 2024 as well.

Construction volumes will remain relatively high this year as well

The latest numbers published today about what is happening on the construction market show that, despite pessimistic expectations, one cannot complain too much about the health of the construction sector. If you look at the year 2023 as a whole, it is true that construction volumes decreased, but not by much, 6% of all. For comparison, in the same period, for example, the volume index of retail trade decreased by 8% and the volume index of manufacturing production by 11%. The main reason for the slowdown in construction activity was the more modest construction volume of buildings than before. At the same time, for example, the construction volume of various facilities such as roads, bridges, etc. increased. Also, compared to the previous year, significantly more new apartment buildings were commissioned. In the last quarter of 2023, as many as 209Â 000 m2 of new living spaces were approved for use – so many new homes were completed in one quarter in Estonia, probably last time in the 1980s.