Research Center
Cyprus Economy

CYPRUS: Demand for building materials is a sign of resurgence

25 May, 2019

An increase in sales of locally produced building materials and a significant spike in imports is a tell-tale sign that the construction industry is cementing its progress made over recent years.

According to Cystat data, imports of iron rods used in the construction industry saw a substantial increase of 22% in 2018 compared to the previous year, while imports for the first two months of 2019 suggest that the current year will also record gains in imports of primary building materials.


Cystat data indicate imports of iron rods used in the construction industry stood at 157,924 tonnes In 2017 and increased to 186,163, while imports for January-February was 33,000 tonnes.


Local producers are also reporting that their sales are continuing to rise, as a reflection of the upward trend in the broader construction industry.


Muskita, a company with a large presence in the production of aluminium said that sales for 2018 recorded a smaller increase than that of 2017, a reported 30%.


“However, still it is an indication that the industry’s business cycle is growing. We do note that we expect that coming years will see small increases and eventually stabilisation of sales,” said a Muskita representative.


Talking to the Financial Mirror, Demetris Zavallis, Muskita’s sales manager said that although they have yet to reach sales figures prior to the real estate crisis, the increase over the past two years is significant in comparison to 2016.


He said that everyone involved in the sector had seen their activity shrink by at least 70%.


“The freeze imposed on the sector by the crisis, the subsequent restriction on housing loans by banks had a destructive effect on the industry.”


He added that now that banks have started to give out loans, people are encouraged to buy a house.


Zavallis said that the industry has been positively affected by government schemes which have encouraged the refurbishment of hotels, but also of ordinary people to renovate their homes.


“Our products in 2018 have gone to big developers, but also to developers building and renovating houses and hotels.”


He noted that the Citizenship for Investment scheme is still driving the industry, but it is being diversified as Cypriots are entering the market in search of new homes.


“Risks still persist, such as possible restrictions to the Citizenship for Investment scheme, which will at some point come to an end one way or another, but the industry has a stable forecast for the foreseeable future.”