Construction output in the Czech Republic increased by 0.9% year-on-year in February, according to data from the Czech Statistical Office. Civil engineering recorded a 1.3% rise, while ground construction grew by 0.7%. Despite continued growth, the sector continues to face long-standing structural challenges. One of the most pressing issues remains the slow permitting process, which affects the timeline of new projects and delays urban development. Efforts to streamline permitting procedures have yet to yield significant improvements. Outdated land-use plans and the slow pace of spatial planning reform are also cited as key obstacles. Adjustments to zoning plans often take several years, restricting development potential and contributing to rising housing costs. The proposed reform of spatial planning has yet to see clear progress or a definitive timeline. Material supply is another growing concern. No new quarries have been opened in the country for years, and recycling of construction rubble is insufficient to meet current demand. Without a national raw materials strategy, the industry faces long-term risks to its material supply chain. Labour shortages continue to limit the capacity of construction firms. A declining number of graduates in technical disciplines has reduced the availability of skilled workers, both in the private sector and within public authorities responsible for permitting. The introduction of the new Construction Act has exacerbated staffing shortages in planning offices, resulting in further delays to permit approvals. The regulatory burden on the industry remains high. Some Czech building standards exceed those in neighbouring countries such as Germany and Austria, which adds to construction costs. There are also concerns that elements of the EU Green Deal, if not carefully adapted, could further strain the sector, echoing the challenges already seen in the automotive industry. While the construction sector continues to grow modestly, experts warn that without coordinated policy support and systemic reforms, its long-term development may be at risk. Source: Central Group