**Title: Construction Sector Remains a Key Pillar of Cyprus Economy**
The construction sector in Cyprus has demonstrated significant growth, solidifying its role as a crucial component of the nation's economy. According to a recent survey conducted by the Cyprus Statistical Service (Cystat), employment in the construction industry reached 39,700 workers in 2024, reflecting a 1.9 percent increase from the previous year’s total of 38,900.
The survey, released on Wednesday, highlighted a robust performance across various segments of the construction industry. The value added by the sector rose by 10.7 percent, reaching €1.75 billion, up from €1.58 billion in 2023. This growth is indicative of sustained demand, as the overall production value of the construction sector increased by 7.4 percent, amounting to €6.70 billion compared to €6.23 billion the previous year.
Residential construction emerged as a leading driver of this expansion, with output in this segment rising by 8.6 percent. Non-residential buildings and civil engineering projects also contributed to the positive trend, with increases of 2.6 percent and 2.0 percent, respectively. New construction investments totaled €3.82 billion in 2024, marking a 6.4 percent increase from the previous year.
Despite broader economic challenges, including geopolitical tensions and a slowdown in tourism, the construction sector has remained resilient. Recent data from Cystat indicates that construction activity continued to thrive in early 2026, with the Index of Production in Construction rising by 0.7 percent year-on-year during the first quarter. Additionally, the Output Prices Index in Construction saw an increase of 4.7 percent, suggesting that the sector is adapting to rising building costs.
The prices of construction materials have also been on the rise, with a reported increase of 3.12 percent in June compared to the same month last year. This surge has been attributed to higher costs for materials such as aluminium products, plastics, and electrical fixtures. Despite these challenges, investment in the construction sector remains strong.
A recent analysis by Eurobank Research underscores the resilience of residential construction, noting a year-on-year increase of 4.7 percent in housing investment during the first quarter of 2026. This growth has been supported by a rise in mortgage lending, which has contributed to a significant increase in building permits—up 48.8 percent in January and February—and a 56.5 percent expansion in the authorized construction area. These figures indicate a robust pipeline of future projects.
The property market has also shown resilience, with property sales increasing by 14.1 percent in the first four months of 2026. However, growth has moderated to 4.8 percent in May, attributed to a decline in demand from overseas buyers.
Looking ahead, Eurobank anticipates that the construction sector will continue to be a vital pillar of Cyprus' economic landscape throughout the remainder of 2026. The outlook remains positive, supported by favorable financing conditions, ongoing demand in the housing market, and sustained investment in construction projects. Despite the external risks that may impact other sectors, the construction industry appears well-positioned to maintain its momentum in the coming months.
As Cyprus navigates through various economic challenges, the construction sector's performance highlights its importance not only in providing employment but also in driving overall economic growth. The continued investment and development within this industry will be critical as the country seeks to bolster its economic resilience in the face of uncertainty.