Construction activity in Estonia saw a modest decline in 2022, despite an increase in residential building, as overall construction volumes dropped by 1.4%.
According to construction statistics released by the Statistics Office, Estonia's economic growth last year was modest, reflected in the decline of construction volumes. In the fourth quarter and for the overall year, construction activity decreased by 1.4%. While building construction showed an increase, the volume of infrastructure construction saw a significant decline of 6.8%. Raul Eamets, the chief economist at Bigbank, highlights that the overall construction market did not gain momentum from major projects like Rail Baltic.
Interestingly, the growth in private residential construction indicates a positive trend in welfare and income levels for the population, as this sector has seen consecutive growth for two years. Despite challenges in larger construction projects, this segment is thriving and provides a silver lining in an otherwise subdued economic context. Eamets emphasizes the contrast between the performance of building and infrastructure projects in this analysis.
The implications of these trends signify a complex landscape for the Estonian economy, where positive signals in residential construction suggest consumer confidence, yet the pullback in infrastructure development raises concerns about the future support for economic growth. This dichotomy may affect policy decisions and investment strategies moving forward.
