Page 93 - Economic report 2020

good performance was reflected in an upward
CONTRACTED WORKS - CONSTRUCTION trend in employment. However, some indicators
SECTOR (half-year July-December 2022) Chart 11.4 for the sector are beginning to show the first

signs of a slowdown in real estate investment
in the second part of the year, mainly due to
worsening finance conditions after more than a
decade of very low interest rates.

Growth in the volume of contracted works
slowed in the second half of the year, due to
a reduction in non-residential contracts, but
above all, due to a clear slowdown in contracts
in the housing segment, which, despite still
being the main driver of activity, lost some
momentum due to the situation of uncertainty
Low Normal High and increasing finance costs.

Source: Chamber of Commerce, Industry and Services of Andorra.
However, there is great concern among the
businesses about the difficulties in meeting
demand due to supply problems. The sector mainly and strongly highlights a workforce shortage
and also rising prices of materials and raw materials; both factors are indicated by 77% of
businesses as obstacles to activity in the second half of 2022. Moreover, 68% of surveyed
businesses indicated that they have problems related to delays and increases in transport services
(12 percentage points more than six months earlier) and 51% confirm supply problems in some
basic materials (4 points more than in the last half-year). In general, the negative impact of these 91
tensions is contributing to a notable increase in operating costs, a problem that has become more
important since the last half-year and concerns almost six of every ten construction companies.

BUSINESSES’ OPINIONS ON DEVELOPMENTS IN THE CONSTRUCTION SECTOR
(% of businesses) Table 11.3

2020 2021 2022
Jan-Jun Jul-Dec Average Jan-Jun Jul-Dec Average Jan-Jun Jul-Dec Average
1. Business activity Good 0 47 24 52 53 53 61 68 65
(reviewed half-year) Normal 57 35 46 42 47 45 34 18 26
Bad 43 18 31 6 0 3 5 15 10
Balance -43 29 -7 46 53 50 56 53 55

2. Volume of executed works Higher 8 13 11 55 64 60 51 54 53
(compared with same half-year Same 12 39 26 24 33 29 43 26 35
of previous year)
Lower 81 48 65 21 3 12 5 20 13
Balance -73 -35 -54 34 61 48 46 34 40 Andorran economy: developments in the main sectors | XI. Construction and related industries
3. Contract unit prices Higher 4 12 8 44 36 40 53 40 47
(compared with previous Same 89 74 82 44 64 54 39 57 48
half-year)
Lower 7 15 11 13 0 7 8 3 6
Balance -3 -3 -3 31 36 34 45 37 41
4. Number of employees More 11 12 12 27 17 22 21 26 24
(compared with previous Same 89 82 86 64 83 74 71 69 70
half-year)
Less 0 6 3 9 0 5 8 6 7
Balance 11 6 9 18 17 18 13 20 17

Source: Chamber of Commerce, Industry and Services of Andorra.