TIRANA, April 7 – Construction permits registered a sharp decline last year affected by a temporary nationwide ban in late 2014. Data published by the country’s state statistical institute, INSTAT, shows the number of construction permits dropped by a quarter to 270 in 2014, down from 360 in the general elections year of 2013.
The temporary nationwide ban on permits issued by local government units had a major impact with permits issued in the final quarter of 2014 dropping to 51, down from a record 210 at the end of 2013. Most construction permits were issued in Tirana and the coastal city of Vlora, mainly in non-residential buildings.
The long-ailing construction sector was the key driver of Albania’s growth in the final quarter of 2014 when it grew by around 11 percent and had a 1.56 percentage point contribution to the GDP growth.
The lift of the construction ban last January and the continuation of the payment of government arrears is expected to give a new boost to construction in 2015.
The lift of the ban has enabled the resumption of construction permits for individual houses, public buildings, infrastructure and emergency interventions, as well as buildings serving the economic development, tourism, agriculture and farming
In August 2014, Prime Minister Edi Rama announced a freeze on construction permits issued by local government units, i.e municipalities and communes, until the local elections of 2015, to prevent what he called an ‘urban massacre’ in the country.
Having been one of the key drivers of Albania’s growth in the pre-crisis decade, the construction sector has been one of the hardest hit in the past five global crisis years.
Declining remittances, tighter lending standards on home loans and lower number of construction permits have considerably affected this sector which used to be one of the key drivers of Albania’s average growth of 6 percent annually in the pre-crisis decade.
INSTAT data shows the construction sector accounted for 12.2 percent of the GDP at the end of 2013 down from a record 18 percent in 2008 just before the onset of the global financial crisis.
