Construction sector 6 bln dinars in loss

Cumulatively, the Serbian economy generated profit of 229 billion dinars last year, but several economic sectors cannot catch a break and become profitable including construction.

In 2016, the Serbian construction sector recorded a 6-billion-dinar loss. The pundits say that the reason for that is that the construction companies were agreeing to projects that were very unprofitable to them.

Last year, there were a total of 902 construction companies in Serbia, eight more than in 2015. Also, the number of construction workers grew slightly to 36,443; i.e. 100 more than the year before. Then again, the loss recorded by this sector in 2015 was much higher than in 2016, and it stood at 14.7 billion dinars.

“Construction companies recorded the biggest losses from the projects that they did at dumping prices”, says Goran Rodic, deputy president of the Serbian Chamber of Civil Engineers. “They also took out loans at high interest rates which they are still paying off. Another problem is that many skilled people have left the industry and now you have people who don’t know much about construction in the first place”, Rodic adds.

Financial reports show that construction companies have old receivables, in 2016 alone, grew by approximately 2.7 billion dinars to 7 billion dinars.

“By old receivables we mean the projects that haven’t been paid to them for a very long time. Sometimes, the biggest construction companies wait for their money for ten and more years which incurs loss”, Rodic explain.

A total of five economic sectors recorded losses in 2016, with financial and insurance sector having the biggest loss in the total amount of 20.9 billion dinars which is a 72.9% hike compared to 2015. Apart from construction, the sectors that recorded losses are real estate brokerage (3.15 billion dinars), accommodation services (2.7 billion dinars) and healthcare & social services (160 million dinars).

 (Vecernje Novosti, 26.06.2017)

This post is also available in: Italiano

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