Introduction
The construction sector in the Czech Republic is experiencing a phase of recovery and steady growth. In April 2025, construction output recorded another year-on-year increase, continuing a positive trend that has now lasted for six consecutive months. Despite some mixed signals between different sub-sectors, the overall picture shows a resilient industry driven by infrastructure investments and a stable housing market.
Construction Output Continues to Grow in April
In April 2025, construction output increased by 1.9% compared to the same month of the previous year. This marks the sixth consecutive year-on-year rise, indicating a solid recovery in the sector after the slowdowns of previous years. However, when compared to March 2025, there was a month-on-month decline of around 5%, suggesting a short-term adjustment following strong winter activity.
Performance by Construction Sub-Sectors
The construction industry is primarily divided into two main segments:
Building Construction (Residential and Non-Residential)
This category includes the construction of housing, office buildings, and other structures. In April, building construction grew by 1.8% year-on-year. Although this is a positive figure, there is a noticeable slowdown in the launch of new residential projects, which may indicate a cautious approach from developers and investors.
Civil Engineering (Infrastructure Projects)
This segment showed stronger growth, increasing by 2.3% year-on-year. Infrastructure projects such as roads, railways, and energy networks are playing a key role, supported by public investment and European Union funding. Civil engineering remains a major driver of the industry.
Building Permits and New Housing Starts
Building permits are a key indicator of future construction activity. In April, the total value of approved projects dropped by 9.9%, mainly due to a decline in large-scale developments, while medium and small-scale projects held steady.
Details include:
- 2,688 housing units were started, a 26.2% decrease compared to April 2024.
- 3,908 housing units were completed, a nearly unchanged figure from the previous year.
These figures suggest a slowdown in the planning of new homes, while completions remain stable — a sign of a market balancing supply with existing demand.
Construction and Industrial Production Trends
The positive momentum in construction aligns with broader economic indicators. Industrial production in April rose by 2% year-on-year, reinforcing the outlook for sustained economic recovery. Additionally, industrial orders — especially from abroad — increased significantly, pointing to healthy demand across sectors. This broader industrial expansion benefits the construction industry, especially infrastructure and industrial facilities.
Outlook for the Coming Months
The outlook for construction output in the Czech Republic will depend on several factors. Key among them are public investments and the continued support from EU funds. The housing market’s response to interest rates, labor availability, and raw material costs will also shape future activity.
The decline in new building permits could signal a shift towards consolidating ongoing projects rather than launching new ones, offering a chance for the sector to build on solid foundations without overheating.
Conclusion
April confirmed the positive trend in Czech construction, with a 1.9% year-on-year increase and six months of consecutive growth. While some indicators suggest a phase of stabilization, the sector remains robust, led by public infrastructure projects and steady housing completions.
The key theme moving forward will be balance — between expansion and sustainability, new projects and completed ones. Given the overall economic momentum, cautious optimism is warranted for the remainder of 2025.
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