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The following table outlines general information on the Latvian construction market:
Figures in EUR million, unless indicated otherwise 2003 2004 2005 2006
Civil engineering total* 289 360 456 688
Non-residential buildings* 349 382 466 592
Residential buildings total* 74 116 186 268
Total construction on own account* 712 859 1,108 1,548
Total construction output 747 905 1,164 1,585
Annual change in construction volume index, % 13.3 13.9 15.5 14.4
Annual change in construction cost index, %
*Based on the Construction Survey data
Source: Central Statistics Bureau of Latvia
-1.3 6.4 11.4 20.9
At the end of 2006, the Latvian construction industry employed 117,000 people, or 10.6 per cent of the
total workforce. Construction costs have been rising at an accelerating pace since 2004. They
increased by some 21 per cent in 2006, more than in any other year in a decade. Although the
construction industry headcount has roughly doubled since 2002, the labour shortage has become the
major constraint for growth: construction workers’ wages increased by 44 per cent in 2006 (up 16 per
cent from 2005).
According to the Central Statistics Bureau of Latvia, there are more than 4,000 construction
companies in Latvia; a vast majority of these are small and medium-sized enterprises. Over the past
few years, the sector has become more concentrated, since the rising construction costs favour
economies of scale. The largest players in the market are general constructors, who outsource most of
the work to the smaller companies. According to the Latvian Builders’ Association, the top five of
these (Skonto Buve, Merks, Re&Re, PBLC and BMGS) had a combined market share of some 21 per
cent in 2006.
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