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Construction Slows Down

Contractors will reduce the amount of construction work in residential housing next year, according to information from the Confederation of Icelandic Employers (CIE) and the Federation of Icelandic Industries.

This announcement was contrary to the recent forecast by the Central Bank of Iceland that predicted that investment in housing construction would increase by 3.8 percent in 2007.

The organizations say the slow-down both in the Reykjavík area and outside the city is a due to reduced and an attempt to prevent an over-supply of residential housing and a price crash. Some companies intend to postpone construction of developments for which they have already obtained permission, while others say that they will proceed more slowly with developments.

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