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Cyprus construction industry shows no sign of recovery

The Island’s construction industry is still struggling through recession according to the Federation of Building Contractors Associations of Cyprus (OSEOK) with a third of its workers unemployed.

unemployed construction workers THE 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.

Readers' comments

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  • Robert Briggs says:

    Hi Folks, ITV’s “Homes from Hell” series will be broadcast early / mid July 2011. So more free publicity for the glorious Cyprus property “industry”? Cheers!

  • James JH Lockhart says:

    Last person leaving please turn the lights out ?

  • Dee says:

    Agree 100% with your comments @ Mike and Nigel.

  • @Mike – It has indeed been a tragedy waiting to happen.

    In the UK we have a saying “make hay while the sun shines” – and this is what the developers were doing for a number of years.

    However, rather than storing some of that hay away in a safe place for a rainy day, developers ran their businesses in the mistaken belief that the sun would never stop shining.

    As for the unemployed construction workers, what other work could they do? Many of them are unskilled – and many of the jobs for unskilled workers have been given to ‘cheap’ foreign labour. I notice to my dismay that there are very few Cypriots working in hotels and restaurants – most of the staff are eastern Europeans.

    Before moving here permanently nine years ago I was a regular visitor to the Island for 20 years. Over that time I saw many changes – some good and some not so good. But since I have moved here changes have accelerated and much if the Island’s natural beauty has been buried under tons of concrete. Many of the areas I enjoyed visiting, particularly in Paphos, are now covered with little white concrete boxes with zero architectural merit.

    However it seems that the Russians and Chinese have now become the Island’s saviours – at least I’ll be able to get a good Chinese takeaway!

  • Mike says:

    This has been a tragedy waiting to happen & families are suffering. However only because of intransigence in some cases.”A third of all Cypriot construction workers said they were out of work”; That may well be the case but why do those workers not revert to their previous occupations now that the bubble has burst. It will never be repaired. Prior to the building boom around the time EU entry there were very few construction workers on the Island and those of you who have been here for 30,40 or 50 years will remember that no construction took place in August. It was sustainable, manageable and complemented the tourism sector.

    The scramble for second, cheap homes in the sun has led us to where we are today where those ‘cheap’ homes are far more expensive to buy than elsewhere, are still cheaply built by anyone other than a time served builder. (Waiter or tailor yesterday – builder today). Almost everyone in Cyprus at one stage around 2004/5 was either a ‘Developer’ or Construction worker, in the loosest possible sense of the words.

    When property returns to where it needs to be in the market then it will pick up. Sadly being Cyprus we tend to actually listen to and sometimes believe the rhetoric and romantic ideology emanating from our finance minister.

    Simple common sense and elementary logical reasoning will indicate that the concrete we are covering our Island with is no longer of any interest nor is it desired by that goose that was laying the golden eggs. We must now live with the errors of our ways, learn from our mistakes (don’t hold your breath), no longer live in denial and meet the challenge before us.

  • Andrew says:

    It is hardly surprising that the construction industry is suffering given the global economic climate. Cyprus however has never heard the saying ” When you are trapped in a hole stop digging”, because for sure they are digging themselves ever deeper, with the disgraceful Title Deed fiasco.

    I feel sorry for the many trades people and their families who are being laid off because of this.

  • The views expressed in readers' comments are not necessarily shared by the Cyprus Property News.


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