Construction decline in Slovenia to decelerate

The decline in Slovenia's construction sector is likely to halt this year but output is forecast to stay subdued until 2013, according to economic research company Buildecon.

While the sector as a whole remains weak after being hit hard by the global economic downturn, there are signs of improvement in civil engineering, which Buildecon said was set to increase, or at least stagnate, in the near future.

The civil engineering sector saw large reductions in 2009 and 2010 after being affected by the completion of the biggest civil engineering project in Slovenia's history - its highway construction programme.

As a result, new highway construction works have gradually tapered off - they decreased from €600 million in 2007 to €300 million in 2010, and are estimated to have sunk further to less than €200 million last year.

But while the civil engineering sector is now set to stabalise, there are no signs that Slovenian construction will return to levels of the boom years of 2007 and 2008.

The residential market in Slovenia is still suffering, after halving output in the last three years. Buildecon said most newbuilds were constructed by individual investors co-operating with small construction companies. This segment has proved to be more robust than residential construction by professional development companies, which continues to decrease and is forecast to further drop in 2012.

Meanwhile, non-residential construction is forecast to see a slight rebound in 2012 and 2013, particularly in the industrial, warehouse and retail segments, after experiencing declines in 2009, 2010 and 2011.

Buildecon provides sector forecasts and analysis on eight east European countries - Bulgaria, Croatia, Romania, Russia, Serbia, Slovenia, Ukraine and Turkey.