Construction sector’s contribution to economy drops by 7%

Tirana Times
By Tirana Times November 13, 2015 10:20

Story Highlights

  • The construction sector saw its share of gross value added (GVA) by main sectors drop to 11 percent at the end of 2014 compared to 14.9 percent in 2010 and a record high of 18 percent just before the onset of the global financial crisis in 2008

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ndertimTIRANA, Nov. 11 – As elsewhere in the region, construction has been the most affected sector in Albania’s economy during the past six crisis years, losing its position as one of the key drivers in the pre-crisis years and cutting thousands of jobs.

Data published in the latest 2015 progress report by the European Commission shows the construction sector saw its share of gross value added (GVA) by main sectors drop to 11 percent at the end of 2014 compared to 14.9 percent in 2010 and a record high of 18 percent just before the onset of the global financial crisis in 2008. Its contribution to employment has also been reduced to only 6.4 percent, compared to 8.2 percent in 2011 and 9.9 percent in 2009 when Albania was one of the few countries to register positive growth rates.

With the remittances-fueled construction boom almost over, more and more Albanian enterprises are turning to agriculture as a growth opportunity, engaging mostly in egg, fruit and vegetable production, a considerable part of which are destined for exports. A considerably number of the start-ups are subsidiaries of long-ailing construction companies which are turning to agriculture to diversify their investments. Some 244 construction companies closed down in 2014 when the number of active enterprises dropped to 4,575. The situation is also a result of a sharp drop in remittances, whose overwhelming majority comes from crisis-hit top trading partners Italy and Greece, the hosts of around 1 million Albanian immigrants.

The services sector, dominated by ‘trade, hotels and restaurants,’ ‘transport,’ ‘Post and telecommunication’ had a GVA share of 52.2 percent in 2014, almost the same to 2009  but saw its employment share rise to 39.4 percent, up from an estimated 36 percent in 2009.

Agriculture is the least productive sector in the Albanian economy employing about 43 percent of the country’s population but providing only 22.6 percent of the GVA. Its contribution to the Albanian economy has increased by about 3 percent since 2009 while employment has slightly dropped. The country’s state statistical institute, INSTAT, reports in its 2014 business register shows the number of new businesses engaged in agriculture, forestry and fishing quadrupled in 2014 when it rose to 1,031, up from only 259 in 2013.

Industry has seen the biggest growth in its contribution to the GDP fuelled by large investments in the oil and mining industry. Industry accounted for 14.2 percent of the GVA in 2014, up from only 11.6 percent in 2009. It also saw its share of employment increase to 11 percent, up from 10 percent in 2009.

Tirana Times
By Tirana Times November 13, 2015 10:20