The outlook for the Estonian construction market is moderately optimistic, said Margo Dengo, CEO of Maru Ehitus, in an interview on Äripäev Radio.
Demand remains strong—Maru Ehituse receives a large number of price inquiries, many of which lead to actual projects. This momentum is being driven largely by the local defense sector and developers. “We’ve been supported by the energy sector, where we’ve historically held a strong position,” added Margo. Stock officeshave become a highly sought-after product:“Stock offices were already the product we were asked about most frequently last year,” noted the head of Maru Ehituse.
However, this upward trend is overshadowed by global and regional challenges. First, while local investors and the government are investing, foreign investors remain skeptical about Eastern Europe. “We would certainly welcome foreign investors back to Estonia,” said Margo.
Despite the growth in construction volumes, we are still 25% to 30% below the peak. “There is significantly more supply, competition in the general contractor market is very intense, and this does not allow for very high margins on contracts,” he noted. Geopolitical tensions have driven up oil and energy prices. This is driving up the prices of key materials, such as bitumen, asphalt, concrete, and petroleum-based plastic products. Major infrastructure projects like Rail Baltica have also led to price increases for certain subcontracting services.
Listen to the Äripäev radio show here: “Oil is driving up construction costs. Maru Ehituse CEO: We’re already feeling the impact strongly”