Statistics Finland today announced construction and housing production statistics from January to the end of March of the current year. Before this, data was only available up to October 2014. The statistical break in construction and housing production is the longest in Statistics Finland's statistical history. Considering the cyclical situation of the economy, the break in statistics could not have happened at a worse time.
The problems of the statistical reform do not lie with the Statistics Finland, because with the introduction of the new permanent building code, municipalities have difficulties in submitting building data to the Population Register Center. Statistics Finland will base construction and housing production statistics on the materials of the Population Register Center, which are currently incomplete. Access to sufficiently comprehensive and reliable data therefore prevents the production of statistics for the time being.
The information published today gives a quite different picture of the situation in house construction compared to the information published last December. Already in December, it was clear that especially the starting information is incomplete. In October of last year, house construction start data was approximately 24 million cubic meters, and building permits were correspondingly approximately 29 million cubic meters. Now in March, based on the new estimated data, the level of starts is about 34 million cubic meters and permits are about 30 million cubic meters, respectively. The level correction in terms of starts was expected due to the lack of an increase procedure, but the magnitude of the revision is still quite large. The higher level of construction permits for the start-ups is also striking.
How do the changed data relate to the forecast published by Construction Industry in March? Even though the numbers for both house construction cubic starts and apartment starts are clearly higher than in our forecast in March, the cyclical picture remains more or less in the same direction. The starting blocks for house construction are already growing, but the volume will only turn to growth next year.
Also in terms of housing production, the level of starts changed from October 2014 to March of this year, from approximately 21 apartments to 000 apartments. In March, we predicted a total of 29 housing starts for 400, which is clearly below the current statistics. In March, the RAKSU group of the Ministry of Finance estimated the level of housing production at around 2014 apartments.
Despite the new data that arrived today, the construction statistics break still continues. About a fifth of the starts are still evaluated based on the method. For this reason, Statistics Finland does not publish accurate information in public statistical databases. The next update to the information will possibly be in the week after Midsummer. Hopefully, in this case, there will be enough information so that the updates of the material can finally get back to a normal schedule.
Sami Pakarinen
Chief Economist
Confederation of Finnish Construction Industries (CFCI)
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