Slovak construction market to grow 4 percent in 2015
Civil engineering construction is expected to lead the field and drive growth of the Slovak construction sector in the coming years. Residential construction might contribute, but this depends largely on economic development in the country, which drives sales in this arena. At the same time, the non-residential market is at its most volatile in construction, which may continue in the next few years and further affect developments in the industry.
According to a new report entitled “Construction sector in Slovakia 2015 -Development forecasts for 2015-2020” published by the analytical and research company PMR, following a year which boasted signs of stabilisation in 2014, growth is expected to return to the Slovak construction industry in 2015. However, the non-residential market continues to lag behind and thus slow down the development of the industry.
Shaken confidence among investors, falling liquidities, declining available cash for fresh investments, and the consequent fall in demand for construction work all continued to have a negative effect on the Slovak construction industry in 2013 and 2014. The latter was the sixth consecutive year of decline in construction output. The negative performance of Slovak construction in 2014 was mainly the result of a fall in non-residential construction, which, as in the previous year, saw a more accentuated decline.
However, the business confidence in the Slovak construction industry in 2014 and early 2015 has grown, fed mainly by transport infrastructure construction investment plans. As a number of investments in civil engineering constructions are underway and some of the subgroups of non-residential construction picked up in 2014, PMR analysts expect an increase in the growth of Slovak construction output in the coming years: somewhere between 4 percent and 6 percent.
As shown in the report, only companies with between 20 and 249 employees saw an increase in their construction output in Slovakia in 2014. All other categories of contractors suffered declines in their construction output last year. The steepest fall was experienced in 2014 by construction companies with between 250 and 499 employees. This reduction brought their total share as a proportion of the market down to less than 2 percent in 2014. Tradesmen and self-employed people accounted for the largest proportion, almost 36 percent, of Slovak construction output in 2014. However, this primarily reflected the high number of such builders.
In 2014 the number of employees in the Slovak construction industry fell for a fifth consecutive year. This was, however, the lowest rate of decline between 2010 and 2014. This meant over 1,600 jobs were lost in the industry in 2014. Between 2009 and 2014, the Slovak construction industry lost more than 32,000 jobs. The most substantial reduction in employment levels last year, 32 percent, was experienced by companies with 250 to 499 employees. The only category of contractors in which there was an increase in staff in 2014 was that of companies with up to 19 employees.