Bulgaria’s construction output decline deepens to 14% y/y in October

Bulgaria’s construction output decline deepens to 14% y/y in October
By Dimitar Koychev in Sofia December 8, 2016

Bulgaria's construction production decreased 14% y/y in October, after falling 10.5% y/y in September, working day adjusted statistics office data showed on December 8. This was the 12th consecutive month of negative annual production growth.

A likely explanation for the bulk of the decrease in construction production is the slowdown of government’s capital expenditures that accompanies the ongoing transition to the new programming period for EU funds. The consolidated budget’s item “Capital expenditure and net state reserve gain” plunged 57.5% y/y in January-October, according to finance ministry data.

Construction accounted for 4.3% of the nominal gross value added generated by the Bulgarian economy in 2015. According to the latest available GDP data, the sector contracted by a real 0.1% y/y in the third quarter of 2016.

Building construction went down 14.6% y/y in October, after dropping 5.7% y/y in September. The annual decline in civil engineering narrowed to 13.3% from 15.4%.

On a seasonally-adjusted monthly comparison basis, construction production fell 2% in October after narrowing 1.6% in September. In October, building construction decreased 3.3% m/m, and civil engineering edged down 0.6% m/m.