Construction of buildings, especially houses, is an important part of the Greek economy that has long been a primary form of fixed investment. In 1991 more than 5 percent of GDP was produced by the construction industry (see table 8, Appendix). However, the construction of dwellings represented 23 percent of total fixed investment in the country that same year. In 1989 the construction sector generated 6.5 percent of total employment. In 1989 private construction built the equivalent of 67.3 million cubic meters of space, compared with 49.3 million cubic meters in 1985. In both years, about 43 percent of this activity took place in urban areas. Public construction of buildings, totaling 2.8 million cubic meters in 1989, was minor compared with private construction.

Given the important role that construction of private housing has traditionally played in the economy, together with the political significance of housing supply, economic policy makers have favored construction activity as a way to boost incomes, employment, and domestic demand. Thus, the construction sector has been a long-time political favorite that receives tax advantages. In the climate of deficit reductions and tax reform dominating the mid-1990s, however, the increased taxation of construction is being seriously contemplated.

An important part of the activity of the construction sector is large public works projects. The construction sector will receive major benefits from large-scale infrastructure projects contemplated in the second half of the 1990s. Among those projects are an upgraded Athens metropolitan railroad system, a US$3 billion project already under construction; a new Athens airport whose total projected cost is US$4 billion, and major bridges such as the Riou-Andirriou connection northeast of Patras, which is projected to cost US$500 million. Seaport and highway construction is also included in infrastructure expansion plans. Under the terms of EU financing for these major projects, bids for their construction must be opened to international competition. This requirement means that the Greek construction industry will rapidly open up to international competition and to international joint ventures.

Data as of December 1994

NOTE: The information regarding Greece on this page is re-published from The Library of Congress Country Studies and the CIA World Factbook. No claims are made regarding the accuracy of Greece Construction information contained here. All suggestions for corrections of any errors about Greece Construction should be addressed to the Library of Congress and the CIA.