Construction Workers Catching Their Breath – The Value of Construction Works is Rising

The value of construction works carried out in Croatia last year by companies with 20 or more employees using their own workers increased by 7.3 percent compared to 2014, marking the first increase since 2008, while the value of new orders rose by 1.3 percent, according to data published by the Croatian Bureau of Statistics.

According to DZS data, legal entities with 20 or more employees performed construction works last year with a total value of 19.15 billion kuna, and the value of new orders amounted to 13.89 billion kuna.

The value of works performed with own workers last year amounted to 13.4 billion kuna, which was 7.3 percent higher than in 2014.

“This is the first year since 2008 in which an increase in the value of works has been recorded, with a relatively strong trend reversal, from a decline of 7 percent in 2014 to an increase of 7.3 percent in 2015,” states the HGK commentary.

The growth, they emphasize, was driven by works on buildings, whose value has been rising for two consecutive years, while the value of works on other constructions increased for the first time since 2012. “It is evident that last year’s slight recovery in economic activity was accompanied by an increase in construction activity in some areas, particularly in the renovation and construction of part of the tourist capacities and new airport buildings, which raised the value of construction works on buildings, while the growth in the value of works on infrastructure facilities was significantly more modest due to low investment activity from the state and public sector, pressured by the need to implement fiscal consolidation,” they note from HGK.

Of the total value of works performed with own workers, 5.8 billion kuna or 43.4 percent relates to works on buildings, while 7.58 billion kuna or 56.6 percent relates to other constructions.

The share of works on new constructions in the structure of works performed with own workers was 56.2 percent, while other works accounted for 43.8 percent.

In the HGK commentary, they also state that based on the growth in the value of orders, one should expect a continuation of the growth in the value of construction works in the coming months, which would still be more reliant on works on buildings.

The situation in construction in 2015 was characterized by a halt in the decline of construction activity with indications of possible positive trends, but the situation remains very difficult, as evidenced by the fact that last year’s data is significantly lower than those achieved in the pre-crisis year of 2008, they say in HGK.

“Although total construction activity in 2015 was lower on an annual basis, a solid growth of 7.3 percent in the value of works performed by own workers was achieved, with the increase in the value of works on buildings being significantly more pronounced than the growth in the value of works on other constructions,” emphasizes Zvonimir Savić, Director of the Sector for Financial Institutions, Business Information, and Economic Analysis at HGK.