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The collapse of the Greek construction sector

A report by the Institute for Economic and Industrial Research

Athens, 1 April 2015 | Economy
Constuction site (picture:
Constuction site (picture:

The Greek Institute for Economic and Industrial Research presented on Monday, March 30th its latest report concerning the effect of the crisis on the construction sector in the country, indicating a significant fall in turnover from 2006 to 2013.

According to the General Director of Institute, N.Vettas the added value of the wider construction sector has been 8.1 bn Euros in 2013, i.e. around 4% of the GDP, clearly reduced from 22.5 billion or 11% of the GDP back in 2006. At the same time the study that has been carried out jointly with the Association of Companies for Quality and Development of Construction (SEPAK) also illustrates a 51% decrease in the human resources of the sector. In absolute employment figures, 589.000 people were working in construction in Greece in 2008, while the respective number in 2013 has been 287.000.

More than 30% of this recession in construction from 2008 to 2013 is linked with a radical fall in investments in the sector, both private and public.

During the presentation event of the survey, the President of SEPAK, Petros Papaioannou identified overtaxation and the unclear legislative framework as the main reasons for the depreciation of real estate and he invited the Greek government to work harder and more closely with the representatives of the sector to put it back in a path of growth.

Although the crisis has reduced the contribution of the construction sector to the Greek economy by almost 80%, still the sector remains crucial for the country. According to 2013 data every 1€ invested in construction adds 1,8€ to the GDP and 0,4€ in the state budget. At the same time for every 1 million € value produced by the sector creates 39 jobs in the wider economy, 13 of which in the sector itself, while every new job in the construction sector is directly linked with 3 new ones in the wider economy.   

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