Wood retailer: Signs of recovery emerging in Estonia's construction sector

TALLINN - Dormant projects are being reactivated, volumes are growing, and material sales are on the rise as the Estonian construction market is beginning to rebound,Toomas Pärtel, chairman of the board of Puumarket, said on Friday.

"Lower interest rates have restored economic logic, meaning that projects are becoming viable again. Developers are resuming shelved projects financed through bank loans," the CEO of the largest timber retailer in the Baltics noted.

"We're still far from a boom, but investment confidence has clearly increased, and development is moderately positive. In May and June, for example, construction timber sales grew by about ten percent compared to last year. We ourselves made several major investments as well -- upgrading warehouse systems and our logistics fleet to speed up material release and delivery to worksite," Pärtel added.

"Builders and developers are also viewing the second half of the year with optimism. In addition to the local market, exports from Estonia are recovering -- prefab woodhouse exports are gradually increasing, and new markets have opened up," he said.

"At the moment, it's a good time to build because material prices are clearly better than they were a couple of years ago. For example, the price of wood is 40 percent lower than its latest peak, and general construction materials haven't followed inflation either. Due to low demand in Scandinavia and Germany, no significant price increases in construction materials are expected in the third quarter. Prices will likely remain favorable at least until the end of the year, though next year they could already start to rise," the executive noted.

"Although the availability of builders is currently better than average, the situation could change quickly as market activity increases. The best contractors find work fast, and several construction companies are saying that their volumes are already full through the end of the year," the CEO of Puumarket added.