Estonian construction volume grows for second straight quarter

Estonian construction companies increased their output in Estonia and abroad by 3.8 percent year on year in the second quarter, ERR reported, citing Statistics Estonia. Construction volume on the domestic market rose by 4.6 percent.

Estonian companies carried out construction work worth a total of 1.06 billion euros during the quarter. Buildings accounted for 665 million euros and infrastructure for 399 million euros.

Compared with the second quarter of 2025, construction of buildings increased by 4.6 percent, while infrastructure construction, including roads, bridges, ports, main pipelines, communications and power lines, and sports grounds, grew by 2.5 percent.

Domestic construction rises as foreign work declines

Merike Sinisaar, a lead analyst at Statistics Estonia, said the construction market was recovering from a prolonged decline, with construction volume growing for the second consecutive quarter.

Domestic construction of both buildings and infrastructure increased in the second quarter. Building construction rose by 6.8 percent and infrastructure construction by 1 percent.

According to Sinisaar, the increase in building construction was driven mainly by a rise in renovation and reconstruction work. Demand for new buildings, particularly residential buildings, has been declining for a prolonged period based on the number of building permits issued.

The construction volume of Estonian companies operating abroad fell by nearly 10 percent compared with the second quarter of 2025, mainly because of a decline in building construction. Work carried out abroad accounted for 6 percent of total construction volume, compared with 7 percent a year earlier.

Demand for new homes continues to fall

According to the Building Register, 998 new dwellings were approved for use in the second quarter, more than a quarter fewer than in the same period of 2025. The most common types were three- to five-storey apartment buildings and detached houses. Most new dwellings were completed in Tallinn and in municipalities near Tallinn and Tartu.

Demand for new dwellings continued to decline, while the share of detached houses increased. Building permits were issued for 1,346 dwellings, 14 percent fewer than a year earlier. Detached houses were the most preferred housing type in the second quarter.

A total of 256 non-residential buildings, with 151,800 square metres of useful floor space, were approved for use. The largest additions were in industrial, commercial and transport buildings. Both the floor space and volume of non-residential buildings approved for use declined compared with the second quarter of 2025.