New Construction market report from Timetric: "Construction in Lithuania - Key Trends and Opportunities to 2017"
Boston, MA -- (SBWIRE) -- 08/19/2013 -- The Lithuanian construction industry recorded a CAGR of -15.50% during the review period (2008-2012). The housing market contracted in 2009 as interest rates began to rise and banks tightened their lending conditions. Deflation in the property sector was one of the key factors in the decline in domestic demand and contributed to the country's economic contraction of 15% in 2009. Infrastructure investment supported the construction industry during the financial crisis, recording the lowest decline of all construction markets during the review period at a CAGR of -6.43%. Timetric expects the Lithuanian construction industry to record a CAGR of 3.52% over the forecast period (2012-2017).
- Lithuania's real GDP growth moderated sharply from 5.9% in 2011 to 3.6% in 2012, owing to weak gross capital formation and external demand. Following strong growth of 9.7% in 2011, gross capital formation declined by 18% in 2012, as drawdown in inventories and weaker fixed investments slowed investment activity.
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- According to Timetric estimates, Lithuania's real GDP is set to expand at a slower pace of 2.9% in 2013, before recovering to 3.4% in 2014, as domestic demand is likely to offset weaker investment and a marginal slowdown in export growth.
- The demand for class B office buildings remains higher than that of class A buildings. Only Vilnius, Lithuania's capital city and the largest market for office buildings in the country saw new office space development in 2012, with seven new projects coming to the market. Kaunas and Klaipeda, Lithuania's other two large cities have witnessed very little office space development since the economic crisis. Developers are hesitant to start construction on major projects without securing pre-let contracts.
- Declining demand for exports, low domestic consumption rates and banks tightening lending amid an increasing volume of non-performing loans negatively affected the industrial sector's growth during 2008-2010. Lithuanian exports increased by 14.5% and were a key factor in the country's economic growth in 2012. Industrial production output in 2012 exceeded 2008 levels by 1.1% and 2011 levels by 3.7%. Highly-skilled, low-cost labor compared to Western Europe provides the nation with a competitive advantage.
- EU structural funds amounting to LTL5.4 billion have been allocated to Lithuania for the development and modernization of the country's infrastructure during 2007-2013.
- A large proportion of the nation's energy resources are imported from Russia. The Lithuanian government has formed the National Energy Independence Strategy that will aim to achieve security of energy supply. The strategy includes full integration of Lithuanian power systems with European energy systems, the development of local energy generation capacities and links with European gas pipeline networks.
Companies Mentioned in this Report: City Service AB, AB Panevezio Statybos Trestas, Vilsota AB, International Construction Corporation, UAB Kelprojektas
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