- Cyprus Property News Magazine - http://www.news.cyprus-property-buyers.com -

Cyprus construction industry shows no sign of recovery

unemployed construction workersTHE CONSTRUCTION industry is showing no signs of economic recovery with activity levels remaining where they were a year ago, the Federation of Building Contractors Associations of Cyprus (OSEOK) warned yesterday.

Lack of demand, heavy competition within the industry, the financial crisis and difficulties obtaining loans to keep fluid capital are, in that order, the major problems ailing construction, OSEOK bosses said.

About 49 per cent of contractors said their business in the first three months of this year echoed the state of the industry in the same period last year.

A third of all Cypriot construction workers said they were out of work, a figure again comparable to that of a year ago.

OSEOK gathered the statistics in collaboration with RAI Consultants with the aim of creating a construction industry index for Cyprus.

“The impression we’re out of the financial crisis has been proven wrong,” said RAI’s Olympios Tomazou.

The researchers conducted island-wide questionnaires every three months in addition to monitoring and analysing market statistics such as contracts, sales and employment.

A total of nine per cent of all construction projects are currently frozen, only a slight improvement on the 13 per cent stalled at the beginning of 2010.

Contractors cited lack of demand and funding as reasons to pause works.

The district of Paphos initially fared the worst in early 2010 with a reported 69 per cent reduction in activity. Larnaca ranked second with 43 per cent and Nicosia was doing much better with 29 per cent reduction in industry activity.

By the first trimester of 2011, the situation in all cities somewhat equalised with a 47 per cent reduction for Paphos and Larnaca, 45 per cent in Nicosia, 41 per cent in Famagusta and Limassol faring a bit better at 35 per cent.

The construction industry index – a continuous project – aims to monitor development and the impact of external factors, such as the financial crisis.