Companies that constitute the construction sector amount to approximately 2,500, 603 of which are Corporations and Limited Liability Companies, while total employment in the sector exceeded 340,000 persons during the Olympic Games' projects, while it has drastically decreased due to the recession that followed. Construction companies that hold the 7th class contractors certificate amount only to 16.

Construction activity can be further distinguished in the following two categories:

a)Public works
b)Private projects

The private and public construction activity which occupied the majority of the construction companies during 1989-1991, presented a slow down at the beginning of 1990 due to the unfavorable developments in the average cost of dwellings. Specifically, it was particularly affected by high interest rates in mortgage loans, increased production cost due to increase in raw materials and labor cost, economic crisis and limitations in leasing. As a result, during the 1990s the large technical companies of the construction sector turned to infrastructure projects of the Public Sector.

However, since late 1995 mortgage loan interest rates started declining, leasing was released while many areas were included in the city plan. These facts, combined with the Olympic Games of 2004 promoted the construction activity and positively affected its development showing recovery signs. The public projects constitute a key factor of the constructions sector, also due to the convergence program of the Greek Economy with the European Union. In the framework of restructuring, the Cohesion Fund, the Second and Third Community Support Framework (CSF) finance a series of projects that are expected to reshape the country following their completion. The public projects included in the CSF package during 1994-1999 exceeded 8 trillion GrD (23.5 billion euro approximately). Funds of the Third CSF for the period 2000-2006 will amount to 17.5 trillion GrD (12 billion euro approximately) 4.1 trillion GrD of which (12 billion euro approximately) are intended for transportations - highways, harbors, urban development, railways, airports, and urban transportations.

The promotion of the Fourth CSF is in progress and the Commission's proposal for our country amounts to 18 billion euro, with objections coming from the powerful countries aiming at a smaller amount.

The completion of the Second CSF, the realization of the Third CSF (2000-2006) and the potential of the Fourth CSF will significantly contribute to the country’s development, the achievement of the financial and social cohesion and convergence of the Greek economy with the rest of the the E.U. countries.

Some of the major technical infrastructure projects (already completed or under construction) are the following: the new Athens International Airport -Elefterios Venizelos at Spata, the Rio-Antirio bridge, the Athens Metro, the Egnatia Motorway, the Spata-Stavros-Elefsina motorway, the diversion of Achelloos river, National Railway projects etc., while in progress are tenders for the Thessalonica Metro, Thessalonica Airport, extensions of the Athens Metro, improvement works of the railway network and for major self-funded projects such as the Under sea Artery of Thessalonica, the Maliakos – Kleidi, Korinthos – Patra, Tripoli – Kalamata, Central Greece, Ionian Odos motorways. The above projects are of major importance to the Greek Economy, and greatly contribute to the development effort. The execution of the aforementioned technical infrastructure projects resulted to the increase in employment, industrial activity and decisive impact in dealing with unemployment.

Regarding private projects, these could be classified to the following categories: a) Housing, b) Real Estate, c) Industrial Estate, d) Agricultural and Special Estate. This sector is distinguished in various subcategories classified according to their size into large size real estate construction companies or joint ventures, small size construction companies, building contractors and private and arbitrary construction. In the early 1990’s, due to the economic recession of the Greek economy, high interest rates in mortgage loans, increased construction and renting cost there was a decline. However, since 1995 and due to decrease in interest rates in mortgage and the introduction of several areas to the city plan, this sector posted improvement. A key factor regarding private projects’ development is the promotion of the large-scale construction projects such as highways and airports, which in effect create favorable conditions for private construction activity in the wider area.

The sector’s course regarding private projects is associated with the evolution of the construction activity, particularly with private legal construction activity, in turn directly affected by the financial conditions. Based on statistics, legal private construction activity posted a decrease in the period 1990-1995, followed by an upward trend for the three years 1996-1998, declining again during 1998-1999 and respective acceleration of the upward trend in 2001.

Other factors generally affecting the sector’s course are a) the course of the Greek economy, b) loan interest rates, c) know-how regarding co-funded projects, d) the extension of the constructions scheme and e) cooperation between the construction Groups and Banking institutions.

Prospects of the sector

Currently the construction companies face a particularly differentiated status with the respective constructions status in the early 90’s. The competition increased in a period of recession following the Olympic Games, demanding for new organization structures and changes in strategy and management. The increasing pressure for the sectors’ restructuring resulted in major restructuring among construction companies (acquisitions, mergers and strategic alliances), which is a recent phenomenon differentiating the environment. In the last few years further growth requires response to specialization challenges better organization etc. that can not be confronted with the traditional structure of the sector.

Despite delays in the assignment of projects due problems of the legal framework, the promotion of various projects during 2005 provides better conditions for growth sustenance. Tenders under way and in progress contribute towards that direction. It is necessary to proceed with infrastructure projects to achieve balanced growth and for that there are many projects for execution.

At the same time, the legislative framework regarding Public and Private sector Partnerships (PPP) for small and medium scale projects, lays the foundations for further development, immediately leading to liberalization of production forces and support of the sector that in turn will participate in the above scheme.

Moreover, many construction companies in the country have proceeded to actions aiming at entering foreign markets, promoting this way their activity. The most important markets that Greek technical companies target is the wider Balkans area, some of the ex eastern block countries and many geographical areas in the middle East and N. Africa. The continuous changes in the sociopolitical status of the above countries and their effort to reach the financial standards and quality of life of the E.U., creates the need for construction projects that in turn demand exceptionally high construction activity rates for several years. A significant advantage of the Greek companies is their accumulated know how and the relatively low labor cost.

Finally, a more intense activity is expected in areas such as real estate, energy, environment protection etc.

The evolution of the local construction market, its prospects and the competition present demand for: