Money goes to bricks and mortar again: One third of investments in the economy went to housing in 2024

2025-09-16 07:49:13, Ekonomi CNA

Money goes to bricks and mortar again: One third of investments in the economy

Over the past year, the economy further focused investments in housing, while those in technology and machinery and equipment decreased.

Official INSTAT data from Gross Fixed Capital Formation (GFCF) show that the trend is deepening where new investments are not being directed towards productive sectors, but rather towards fiscal assets that do not expand production and employment in the medium term, such as housing.

Gross Fixed Capital Formation (GFCF) measures the net investment an economy makes to build new productive capacity or improve existing ones. Last year, 31.5 percent of net investment in the entire economy went into housing, up from 30.8 percent in 2023.

Investments in machinery and equipment show fluctuations. Their weight has marked a decrease from 24.2% in 2023 to 23.9% in 2024, while within this group, transport equipment has fallen from 7.4% to 7.2%, while net investments in other machinery have also marked a decrease of 0.4 percentage points.

The data show a slowdown in the orientation towards technological modernization. Investments in technological equipment remain very low at a symbolic level, reflecting that this sector has not yet become a priority in the fixed capital structure. In 2024, net investments in this item accounted for only 0.21% of total GFCF.

One notable element is the slight increase in investment in intellectual property products, from 0.32% to 0.37%. This, although small, indicates a trend towards the expansion of intangible capital and innovation. Meanwhile, mineral exploration and software have maintained stability, representing a small but stable share of investment.

On the other hand, agriculture through horticulture, livestock and forestry continues to have a small or negative weight in the structure of net investment in the economy, underlining the weakness of this sector compared to construction and industry. For example, livestock continues to appear with negative values, which signals a decrease in the stock of net investment in this sector or its withdrawal from use.

The data show that the structure of fixed capital in Albania (net investments) remains focused on construction and housing and oriented mainly towards non-productive sectors./ Monitor