Czech construction sector to shrink 10% in 2011

This year will be a very bad one for construction firms

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Currently, there are 450,000 people employed in the Czech construction sector.

In 2011, this number may get reduced by as much as 40,000 or 50,000, due to weaker cash flow into large construction projects, public spending cuts and the end of the Green Savings program, which subsidized house reconstructions.

According to the Association of Building Entrepreneurs of the Czech Republic, everything indicates that this year will be a very bad one for construction firms.

In 2010, construction activities dropped by 7.8 percent, in 2011 it can be 10 percent, said Rudolf Böhm from the board of directors of the union. “Without doubt, we work with the crisis variant… Firms will try to save what they can,” he said.

Trade unions expect 40,000 will lose jobs in the construction sector, blaming Transport Minister Vít Bárta. “In this situation, Transport Minister Vít Bárta said to the public that freeways will be built by the Chinese and today even by prisoners. Which I understand as a disregard for us, construction workers,” said Stanislav Antoniv, the leader of the construction workers union.

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In a collective labor agreement firmed at the end of 2009, trade unions have agreed to a wage freeze in exchange for firms trying to keep their skeleton staff.

We prefer foreigners

However, the latter is getting more and more difficult. Amid the current construction sector crisis with few new construction orders, above all smaller firms react by laying off Czech long-term employees and hiring foreigners, mostly from Eastern Europe and the former USSR countries. They are hired for temporary contracts, often without any documentation.

Off the record, the owners of construction firms admit this. “The truth is that we cannot promise people work, there is little money in the orders, and there is a fierce competition for them, every crown (the Czech Republic’s currency) matters,” said one of the owners of a construction firm in South Moravia.

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Read more: Pulled by German boom: 2010 in Czech economy

Read more: Czech retail and housing suffers, manufacturing grows

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Read more: Czech jobless rate jumps to 9.6 % due to cuts

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