The construction sector has again recorded a 20% increase in the value of construction work in the first quarter of 2021 compared to the same period last year.
If we were to list the activities in the construction sector and other economic activities with which this industry is directly or indirectly related, all the magazine pages would not be enough to present them in the right way. Even if we just listed roads, the list would never end.
Today, the construction industry of Serbia consists of over 11,000 companies that employ over 100,000 workers. According to the data collated by the State Statistical Office (SSO), the value of construction works performed in 2018 on the territory of the Republic of Serbia increased by 13.9 percent, compared to 2017. In 2019, the value of performed construction works increased by 35% relative to the previous year 2018. After an almost 10% decline in 2020, the value of construction work went up by almost 20% in the first quarter of 2021 compared to the same period last year. The construction sector’s share in the gross domestic product of the Republic of Serbia in 2018 was 4.5% (which is 0.4 percent more than in 2017), while in 2019, it stood at over five percent. According to the SSO, this trend continued in the first quarter of 2021 too, when the year-on-year growth of gross value added was the highest in the construction sector of all economic sectors, standing at 19.6 percent compared to the same quarter of the previous year. In the period from January to April 2021, the total number of issued building permits went up 30.8% relative to the same period last year. The number of issued permits for construction of buildings increased by 40.1%, while the number of issued permits for construction of other types of facilities went up by 5.2%. We can easily conclude from these figures that construction has been growing year on year.
GREAT IMPORTANCE OF ROAD INFRASTRUCTURE
Since the Serbian authorities have announced more investments, especially in infrastructure, we expect these positive trends in construction to continue. For example, according to the report compiled by the Fiscal Council from October 2019, following the completion of Corridor 10 and part of Corridor 11, Serbia now has highways that are about 900km long in total. According to the data collated by the State Statistical Office, in 2006, Serbia had a total of 374km of highways, while in the last ten years, this number has increased by more than400 km of newly built highways. The impact of road infrastructure construction on the country’s economic growth is immeasurable considering many factors and areas, whether we are talking about road construction or exploitation during which Serbian machinery, workforce and building materials were used. Improved infrastructure also facilitates business operations.
In the last ten years, the total length of new highways in Serbia has grown by more than 400km.
PROPOSALS FOR BETTER BUSINESS
The most common topics we encountered in conversations with construction companies are numerous proposals for improving and enhancing business. In order for the market to be even better regulated and to improve the business environment in terms of safety of developers and contractors in the coming period, we need to improve control measures to combat unfair competition, encourage domestic companies to do business together, both in the country and abroad, to analyze issues regarding VAT collection, bank guarantees, etc. Also, subsidies or certain financial allocations for the purchase of new machinery and equipment would be of great help to companies, which was also discussed at the meeting held with the representatives of the construction industry, at the Ministry of Construction, Transport and Investments. Benefits related to providing better terms and conditions for housing loans for the purchase of new apartments, which are given in many countries, were implemented in our country last year. Namely, the National Bank of Serbia adopted a set of measures, which reduced the mandatory downpayment for new apartments, as well as regulations that facilitated the purchase of apartments under construction. This approach, in addition to benefits for real estate buyers, also facilitates the development of the construction industry in the new housing segment.
Of course, energy efficiency is an inevitable topic in today’s world. The announced subsidies for citizens for the replacement of doors and windows are also a way to help the construction industry, and at the same time, to raise awareness of the inevitability of this approach in construction. According to the line Ministry, after the implementation of the new model for issuing building permits (so-called CEOP), the number of issued building permits has multiplied. According to construction companies, the aforementioned results could be improved in the coming period by establishing full digitalization of this segment.
We are also continuing to promote growth in the construction sector by connecting relevant stakeholders.
PROBLEM WITH THE WORKFORCE
The shortage and outflow of skilled workforce is a problem that the construction industry in the entire region has been facing for a long time. In Serbia, this problem is easily noticeable, especially considering that increased investments in the construction sector in the previous period also increased the demand for construction workers. According to the SSO, a total of 104,075 construction workers were registered in Serbia in the first nine months of 2019, which is 9.8% more relative to the first nine months of 2018. Also according to the SSO data related to the construction sector, in the fourth quarter of 2021, 161,136 construction workers were registered, which is a 7% increase compared to the same period last year. In addition to the lack of skilled labour, the construction worker market also faces the problem of an insufficient number of students enrolled in vocational construction schools. By including as many companies as possible in the dual education system, students would be prepared to work as construction interns immediately after graduation, and given the increased demand for the workforce, there is certainly enough work in construction for them. Also, construction companies proposed that, with the help of subsidies, they could form in-house training and retraining centres for construction workers. In addition to all the above, both children and parents need to be better informed about the educational profiles and employment opportunities in construction, when enrolling in high schools.
Today, the construction industry of Serbia consists of over 11,000 companies that employ over 100,000 workers.
THE SUPPORT OF THE CHAMBER OF COMMERCE AND INDUSTRY OF SERBIA
Through our Association, we strive to represent the best interests of companies, starting from providing support and answers to current issues, through initiating initiatives for changing regulations and participating in working groups in the line ministries. In 2019, our Construction Association, together with the Drywall Construction Group, published the book “Drywall Construction, Standardized Descriptions of Works, Calculation Rules and Standards”, which will help developers to more precisely create job offers, and to improve their construction work by applying the rules given in the book. Also, in order to digitize the construction industry, we launched an initiative presenting opportunities for the electronic management of construction records. In cooperation with NALED, and as a result of the project for implementation of benefits relating to registration of seasonal workers, we formed a working group that will draft the Law on Employment Due to the Increased Work Volume in Certain Business Segments at the Ministry of Labour, Veteran and Social Affairs. We are also continuing to promote growth in the construction sector by connecting relevant stakeholders.