#Insider
Our source in the Cabinet of Ministers reported that the real situation in the construction industry is significantly worse than official statistics. The sector began to decline in the first half of the year, but after the impact intensified in August, several major sectors have virtually ground to a halt. New projects are being frozen, existing ones are being extended, and businesses are avoiding construction without guaranteed financing.

The Government is focusing on the July statistics as the last sign before a sharp deterioration: minus 25.9% year-on-year and minus 11.2% over the seven months. The 36% collapse in engineering construction is considered particularly alarming, as this segment reflects the state of infrastructure and large-scale industrial investment.

Since August, the energy factor has been added to the existing problems. Power outages, rising material and logistics costs, labor shortages, weak lending, and the risk of further impacts make long-term projects economically unpredictable. According to the source, some developers are currently not considering the economics of new projects at all, but are waiting for a clearer picture in the winter. The Cabinet of Ministers fears not just a temporary decline, but a systemic crisis in the industry. If the energy situation continues to deteriorate, construction could enter 2027 with virtually no new major projects. The paradox is that a drop in demand won't necessarily lead to lower real estate prices: reduced supply, expensive materials, energy, and financing can, on the contrary, drive up the cost per square meter.

In effect, the construction sector is becoming yet another indicator of a halt in investment activity: businesses stop building for the future when they don't understand what the economy will be like in six months.