Instead of a decrease in orders, an increase is now expected

In fear, there are big eyes, our elders say, or as the construction entrepreneur Ivan Čeko from Knin would put it,’people always see the wolf at the stream before it arrives.’ Talking in the spring with some construction entrepreneurs, they all expressed concern about what the second half of 2022 would bring, as a decline in the number of construction work orders was anticipated. A fierce war broke out in Ukraine, fear of the world spread across the planet, but although the war continued, construction in Croatia fortunately continued at the same intensity. Such are the announcements for this year.

The order book in construction companies was slowly filling up in the spring for the second half of the year, which was confirmed to us by some other construction entrepreneurs we subsequently asked what was happening. However, there was no panic; experience from previous crises instilled hope that this potential one would also be bridged, but it certainly seemed like a good time for builders to prepare for the next period. However, after the initial shock of the war, investors decided to continue projects, which was certainly aided by the fact that interest rates on loans were (and still are) historically low, so it was necessary to seize the opportunity and invest while money was still cheap.

However, we do not have data for the entire 2022 (we will only have them in March), but as Mirjana Čagalj, advisor to the president of the Croatian Chamber of Economy for construction and transport, says, in the first half of 2022, there were investments worth 1.9 billion euros (14.2 billion kuna), and in the third quarter of 2022 alone, more than 1.3 billion euros (9.9 billion kuna), which means that the number of orders did not decrease but even increased by 40 percent compared to the second quarter. Compared to the third quarter of 2021, the value of orders increased by as much as 63 percent. And a comparison of the first three quarters of 2022 with the same period in 2021 shows that the value of construction investments grew by 24 percent. If we factor in inflation, i.e., the rise in construction material prices and labor costs, it can be said that this data also indicates an increase in the number of orders or at least that it remained the same. Therefore, it did not decrease. Regardless of the fact that we do not have data for the last quarter, according to our interlocutors, the trend has actually continued.

– If we compare new orders with previous periods, there is a visible increase in absolute amounts: the value of new orders in 2021 was almost 3.5 billion euros (26 billion kuna), and in three quarters of 2022, it was above 3.2 billion euros (24.1 billion kuna). This year, we do not expect deviations in the trend of increasing value – says Čagalj.

And in the HUP Association of Employers in Construction, they confirm that leading construction companies recorded an increase in orders last year compared to 2021, and this year they expect further growth in the number of orders due to the intensification of renovation work.

– To improve business conditions, the construction sector expects activities to regulate relationships and regulations, especially in public procurement, national classification of construction companies, general contractual conditions – customs, the Law on Obligatory Relations, particularly in the part that regulates the construction contract, and the Enforcement Act, i.e., in the redefinition of promissory notes as abstract enforcement documents – they state from HUP.

The number of orders has also increased at MDK Građevinar from Veliko Trgovišće, one of the largest construction companies in Zagorje. Its director, Krunoslav Pavlinić, says that in the second half of 2022, they contracted jobs with both private and public clients. However, he emphasizes that in some projects, another problem has arisen that construction companies are facing.

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