Slovenia

General economic overview

The COVID-19 pandemic and the stringent measures imposed to contain its spread had a strong negative impact on the Slovenian economy, especially on services. Slovenia is expected to register a decline of 6.5% in GDP in 2020 - after six years of continuous growth. The situation in construction was much better than in other services such as catering, event organization, non-food businesses and personal services for consumers.

In 2020, the value of construction works increased by 1% in real terms. Building construction shrank by 3.5% with an increase of 14% in residential construction and a decrease of 10% in non-residential construction. Demand for residential construction was kept at a high level due to the fact that the purchasing power of the population remained high and interest rates low. The value of civil engineering works increased by 3% as the construction of some major transport infrastructure projects started. The short-term outlook remains very favorable for civil engineering and residential construction, but is less positive for non-residential construction.

Due to labour shortages in the sector, price pressures are increasing. Labour costs increased by more than 5 % in 2020. Average gross wages rose by 5.4% and net wages by 6.2% . The number of jobs increased by around 2% (+1,300).

In 2020, the number of building permits for residential buildings and the planned floor area both decreased by 9%. The bottom was reached in March and April 2020 when administrations were closed except for urgent matters. Orders in civil engineering rose by 23%, while they shrank by 10% in the non-residential segment.

Both lockdowns negatively affected the number of real estate transactions, but not the prices. Residential real estate prices are expected to increase by about 4.5% this year.

After a marginal increase in the value of construction works in 2020, an intensification is expected for 2021. Investment in construction by public and private investors will increase. Investment in public infrastructure will increase thanks to new infrastructure projects. Growth will be fueled by additional EU funding from the Recovery and Resilience Plan. Growth in residential buildings will also continue at a rate of 6% in 2021.

Housebuilding

In 2020, a 14% growth in the value of residential construction was recorded, the sixth consecutive year of intense growth. A high level of overall employment, solid savings of citizens and the availability of mortgage loans are driving the housing market despite continuously increasing housing prices. The growth in residential building is estimated at 10% for 2021.