Business and residential construction has grown rapidly in Azerbaijan. In 2014, the sector grew by 2.3% on the previous year. The GDP output of the sector, was worth 7.3 billion AZN in 2014, constituting 12.5% of the GDP. The majority of construction projects (60%), are centralized in the Absheron Peninsula, due to the availability of raw materials and high demand. In 2014, the production of construction materials reached 345 million Manat, exceeding the previous year by 21%. The construction business has become a very competitive sector with strong local companies providing services for diverse projects, including the development of residential areas, business offices and hotels.
The implementation of EU technical standards is a key development in the industry. In 2012, the EU ‘Energy Saving Initiative in the Building sector’ was launched in Azerbaijan as part of the EU-funded Innogate project. The UK`s BREEAM system, a design and assessment method for sustainable building is being increasingly applied. Accordingly, there is significant demand for resource-efficient technologies for insulation, heating cooling, water supply, architectural and engineering services, designs and methods following green building standards to local firms, development of smart complexes (including housing, offices and shopping centres), and interior design consultancy.
The growth of the sector has attracted foreign investment, from global industry leaders such the UK based company MACE, and the European company, Alsthom.