"From the EUR 3.5bn the market was worth in 2008, we'll fall even below half of that figure this year if the extremely bad trends from the first quarter continue," says Joze Renar, head of the sector's chamber within the Chamber of Commerce and Industry (GZS).
Even the biggest pessimists had not expected such a plunge, nor has such a fall been seen anywhere else in Europe, which Rener in part blames on the inaction on the part of the government.
"Stimulating investment in construction as the most classic crisis measure from the selection of measures in countries in crisis has not been activated in Slovenia."
The faltering industry could be hit even harder with receivership at SCT, which had a 10% market share in Slovenia in 2010 when its business was already down, and about 15% a year earlier.
During its heyday, SCT employed more than 11,000 workers plus nearly as many temporary staff as well as tens of thousands of subcontractors.
Receivership at SCT, which is the most likely scenario after rival Cestno podjetje Ljubljana backed out from its plan to help bail out the troubled builder, will not affect the size of the market.
"That is except for the contracts [SCT] acquired abroad which will probably not be realised by Slovenian companies. This part of the value added is lost for Slovenia."
But Rener warns of the side effects of the receivership, first on the most exposed subcontractors and supplies, which will be wound up, then also on the banks and eventually on highly qualified technical staff.
"The consequences will be even more negative in the long term, as Slovenia will not be in a position to capitalise on the positive effects of the technical, personnel and performance qualifications that Slovenian construction companies developed at times of growth."
This means that the sector will await a new investment cycle, which is bound to reaper in the future, terribly weakened, the official warns.
He says that the state has by far the biggest impact on the size of the market, not only through its projects, but also through how it attracts foreign investors.
"The state has drastically decreased its investment in recent years while failing to keep private capital interested in investing in Slovenia. The interest declined in a similar way than state investment."
SOURCE: The Slovenia Times
