Private investments in Serbian construction industry declining

The construction market in Serbia will record a decline this and next year, and the greatest danger for Serbian builders is the loss of private investments, according to the EECFA (Eastern European Construction Forecasting Association).

“It is noticeable that foreign direct investments in construction have been significantly decreasing during this year, primarily due to investors being cautious when it comes to long-term projects in such unstable circumstances, and especially in a situation where Serbia’s position in the economic conflict between the EU and Russia is undefined and quite uncertain,” says the EECFA report.

Private investments by domestic investors are also on the decline, due to economic uncertainty, rising interest rates and unpredictable costs.

Unlike Slovenia and Croatia, which, despite the extremely unstable global circumstances, will manage to achieve an increase in construction activity of around 4 percent this and next year, Serbia is predicted to record a decline in the construction sector by 6.7 percent in 2022 and 2023.

On the other hand, public investments in construction are not decreasing, despite huge economic uncertainties. This market segment will certainly be the biggest support for the construction industry next year too.

“The price growth could negatively affect future contracts and the volume of infrastructure projects if inflation continues to rise with a further decline in economic activity,” the report said.

This year, construction activities fell by 7.6 percent in the second quarter, and GDP by 6.7 percent year-on-year.

(Nova Ekonomija, 27.12.2022)

This post is also available in: Italiano

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