Construction industry in Slovakia back on track in 2010

After serious reverses last year, growth in the Slovak construction industry should resume in the next few quarters, partly because of low base effects and an expected increase in the number of large construction contracts.

by PMR Publications Monday, March 15, 2010

Last year, the Slovak construction industry saw a major decline after the construction boom. Construction output fell by 11.3%, in contrast to a 12% increase in 2008. The steepest reduction was seen in repair and maintenance work, whereas there was a 10.9% fall in the volume of new construction, modernisation and reconstruction. The slight increase in civil engineering work (0.9%) was unable to counterbalance the steep decline in the construction of buildings (-15.1%).
The residential category started to slump as early as 2008, with a serious decline in the second quarter of 2009, when there was a 50% year-on-year reduction in orders for new residential construction. Activity in non-residential construction, which is the most prominent subdivision of Slovak construction production, was also dented substantially as demand for offices and retail space slumped. The least affected area was civil engineering, but companies have also seen their capacity use rates falling in this category.

In January 2010, the construction industry continued to shrink, but a remarkable 17% increase was seen in civil engineering work. For 2010 as a whole, most of the impetus for the industry will come from infrastructure projects, but local players are also expecting the construction of buildings to recover somewhat toward the end of the year.
Ongoing and proposed projects which should prove particularly lucrative for the industry in the forthcoming quarters and years include:
- the construction of the D1 motorway
- the construction of the R1 expressway
- the construction of the R2 expressway
- the construction of bypass roads on the R4 and R3 expressways
- the construction of a broad-gauge railway line across Slovakia
- the construction of the Bratislava railway tunnel
- the construction of new blocks at existing power stations
- the construction of new nuclear and natural gas power stations
- two airport expansion projects
- the construction of a new national stadium and a new harbour, including a logistics centre.
These projects and others will be catalysts for growth in the Slovak construction industry in the near future. A major rebound will, however, be seen on the market only after sentiment has improved on the global financial markets and banks become more willing to grant loans for property development projects. Construction companies in Slovakia are also asking for the bureaucratic burden to be alleviated.

This press release is based on information contained in the latest PMR report entitled „Construction sector in Slovakia 2010 – Market analysis and development forecasts for 2010-2012”.

For more information on the report please contact:
Marketing Department:
tel. /48/ 12 618 90 00
e-mail: marketing@pmrcorporate.com