The development of the construction sector in the second quarter was driven by faster growth in building construction. Construction output has been increasing since the beginning of the previous year. In the first half of 2026, the sector grew by 3.1% at constant prices (unadjusted data) compared with the corresponding period of 2025. In the second quarter, construction activity increased at a similar pace, by 3.2% compared with the second quarter of 2025.

Looking at the main construction segments, differences in growth rates can be observed. In the second quarter of 2026, building construction expanded relatively rapidly, while specialised construction activities remained broadly at the level of the corresponding period of the previous year.

The strongest growth was recorded in building construction. Output in this segment increased by 12.6% in the second quarter of 2026. The increase was mainly driven by higher activity in residential construction. It should also be noted that the decline in lending rates has had a positive impact on the sector.

Civil engineering output decreased by 3.2% during the period. Growth in the construction of municipal infrastructure was not sufficient to offset lower activity in the other segments.

Specialised construction activities remained broadly unchanged compared with the second quarter of 2025, declining by 0.2%. Segments recording growth included demolition and site preparation, as well as electrical installation, plumbing and other similar activities.

A total of 866 building permits were issued during the period, which was 27.3% fewer than in the second quarter of 2025. The planned floor area decreased by 13.8%. The largest decline was recorded in the planned floor area of industrial buildings and warehouses.

The sector is expected to continue feeling the impact of rising global energy prices. At the same time, positive lending trends and increasing investment are expected to continue supporting construction activity, including both public investment in infrastructure and private investment.

Ministry of Economics
Analytics Department
E-mail: san@em.gov.lv