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CONSTRUCTION  INDUSTRY

Overview

The construction industry has successfully grown during the last few years. It is an important branch of the Estonian economy since construction contributes 8,0% to the total GDP (2006). Construction works conducted in Estonia at current prices amounted to EUR 3,0 bln and construction activities in foreign countries to EUR 0,1 bln in 2006.

The growth of the construction industry during the last few years in current prices is presented in the graph below:


Construction activities 2002-2006

Source: Statistical Office of Estonia


Structure

The growth of the overall construction industry in 2006 thus amounted to 32% in current prices. The fastest growth has taken place in residential construction.

The increasing importance of the residential construction segment is also manifested in an ever increasing amount of building permits and completed dwellings. In 2006 a total of 12 863 building permits for dwellings were issued, an increase of 41% relative to 2005. The number of completed dwellings increased by 29% to 5068 units. 
 

Construction production by type of construction, 2005

Source: Statistical Office of Estonia


Construction of residential buildings takes place mainly in Tallinn and in its closest neighbourhood but also in Tartu and Pärnu. The share of those three cities in the turnover of the market of residential buildings is 70-80%.


Export

Construction works performed abroad constituted about 3% of the total turnover of the Estonian construction companies in 2006. Construction works outside Estonia are performed mainly in Latvia, Lithuania and the Ukraine, where the Estonian copanies are competitive in a cost/quality perspective.

There have not been any remarkable exports to western markets, since acquiring work permits in the destination country has presented difficulties to Estonian companies.


Human resources

In 2007 the construction industry employs approximately 80 thousand people in Estonia, or some 12% of all persons employed in the country. The wages have risen very quickly in recent years, jumping about 20% in 2006. In mid-2007 there are signs that construction workers who have earlier moved to Finland due to higher compensation are returning back to Estonia.  

Construction engineers are trained at Tallinn Technical University (study domains are construction engineering, environmental engineering, transport engineering) and at Estonian Agricultural University (study domain is rural construction engineering). Construction specialists are trained in 18 different vocational schools.


Materials

A large amount of construction materials is produced in Estonia. Decoration materials, sanitation etc are mainly imported. The availability of building materials is satisfactory since the producers have developed their own distribution channels. Major construction firms have direct contacts with the manufacturers of materials. This arrangement allows the builders to control the cost and quality of the materials. There is, of course, a variety of different importers and wholesalers of construction materials.


Costs

In 2006 the construction price index rose by 10,3% compared with the average for the 12 months of 2005. Whereas labour costs rose close to 20%, the cost for construction machinery rose about 10% and construction materials got some 6% more expensive than in 2005. 


R & D

Construction companies have not invested remarkably in the research and development. There is a good base for research in the Construction Faculty of Tallinn Technical University.


Standardisation

National standards concerning construction activities have been developed since 1991. Eleven technical committees of the National Standards Board (out of 26) are directly involved with the standardisation of construction materials and construction activities. The Estonian standards are mainly based on the adopted CEN standards.

Members of Estonian Association of Construction Entrepreneurs, which have been issued ISO 900x quality certificate, are:

Company

Standard

Amhold Ltd

ISO 9001:2000; ISO 14004:1996; OHSAS 18001

Aspi Ltd

ISO 9001:2000; ISO 14001

Clik Ltd

ISO 9001:2000

Deena Ehitus Ltd

ISO 9001:2000

Eesti Ehitus Ltd

ISO 9001:2000; ISO 14001:1996

Rand & Tuulberg Ltd

ISO 9001:2000; ISO 14001:1998

Estconde-E Ltd

ISO 9001; ISO 14001

Eston Ehitus Ltd

ISO 9001:2001

Eviko Ltd

ISO 9001:14001

Facio Ehituse Ltd

ISO 9001:2000; ISO 14001:1996

FKSM Ltd

ISO 9001:2000, ISO 14001:1996

Harju Ehitus Ltd

ISO 9001:2000

Lemminkäinen Eesti Ltd

ISO 9001:2000; ISO 14001

Linnaehitus Ltd

ISO 9001:2000

Megaron-E Ltd

ISO 9001:2000

Merko Ehitus Ltd

ISO 9001:2000; ISO 14001:1996; OHSAS 18001

Maru Ehitus Ltd

ISO 9001:2000

NCC Ehitus Ltd

ISO 9001; ISO 14001

OVS Ehituse Ltd

ISO 9001:2000

Pärnu REV Ltd

ISO 9001:2000

Restor Ltd

ISO 14001:1996, ISO 9001:2000

Rööbasteede Ehitus Ltd

ISO 9001:2000

Savi Ltd

ISO 9001:2001

Silver Agu Ehituse Ltd

ISO 9001:2000

Skanska EMV Ltd

ISO 9001:2000, ISO 14001:1996, OHSAS 18001:1999

Talter Ltd

ISO 9001:2000; ISO 14001:1996

Tartu Ehitus Ltd

ISO 9001:2000

Teede Projekteerimise Ltd

ISO 9001:2000

Teede REV-2

ISO 9001:2000, ISO 14001:1996

TSM Projektijuhtimise Ltd

ISO 9001:2001

Univers Baltic Ltd

ISO 9001:2000

Uus Ehitus RC Ltd

ISO 9001:2000

Viimsi Keevitus Ltd

ISO 9001

Source: Estonian Association of Construction Enterpreneurs


Legislation

The new Building Act entered into force 1 January 2003. According to the new act construction companies have no longer need to obtain construction lisences. In order to be active in the construction market the company must be registered in State Register of undertakings operation in areas subject of special requirements.

Selected legislative acts are also available in English. For more information browse the internet homepage of Estonian Translation and Legislative Support Centre.

 

Industry Association

Members of Estonian Association of Construction Entrepreneurs (EACE) contribute 45% to construction turnover. EACE includes all major players in the Estonian construction market by having all together 100 members. The Association participates in the legislative process and compilation of standards and regulations, provides legal help in preparing documentation, organises training courses, participates in the work of licensing committee etc.


Major construction companies

The dominating companies on the Estonian construction market are Merko Ehitus, Eesti Ehitus, Skanska, YIT, Koger&Partnerid and Teede REV.

Among firms based on foreign capital Skanska and NCC (Sweden) as well as YIT and Lemminkäinen (Finland) are the best known.

 

Additional Information

Statistical Office of Estonia
Endla 15, 15174 Tallinn
Phone: +372 6 259 202
Fax: +372 6 259 370
E-mail:
stat@stat.ee
http://www.stat.ee/


Ministry of Enviroment
Toompuiestee 24, 15172 Tallinn
Phone: +372 6 26 28 02
Fax: +372 6 26 28 01
E-mail:
min@ekm.envir.ee
http://www.envir.ee


Ministry of Economic Affairs and Communications
Harju 11, 15072 Tallinn
Phone: +372 6 256 342
Fax: +372 6 313 660
E-mail:
info@mkm.ee
http://www.mkm.ee


Estonian Association of Construction Entrepreneurs
Kiriku 6, 10130 Tallinn
Phone: +372 6 48 9005
Fax: +372 6 41 0071
E-mail: eeel@eeel.ee
http://www.eeel.ee



Interested in locating in Estonia please contact
Enterprise Estonia
Liivalaia 13/15, 10118 Tallinn
Phone: + 372 6 279 700
Fax: + 372 6 279 747
E-mail: invest@eas.ee
www.investinestonia.com

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