Executive Summary

• Serbian Construction sector experienced a serious growth for 2020, and even the Covid-19 related crises seemed to have a limited impact on this growth. 
• Because of the large number of projects and ongoing works, the construction sector seems to bring stability and resilience to Serbian construction industry.
• Serbian construction sector is one of the most internationalized from the region, with the largest number of international actors present on the ground.
• Most important international actors active on Serbian construction market are  Austrian, Azerbaijani, Chinese, French, German, Russian, Turkish, and EU-level actors.
• Covid-19 impact and recovery capacity
  • Investment in road and railway infrastructure and housing will continue to drive the growth of the construction sector even higher in the second half of 2020 this year. 
  • It is estimated that the new investment cycle “Serbia 2025” worth more than 15 billion euros, will contribute to the further development of the construction industry, which will be driving the growth of the country’s GDP.
  • The construction sector is one of the sectors least affected by COVID-19 in Serbia.  
  • The impact of COVID-19 on the industry was caused by the movement restriction imposed by the Serbian authorities, which prevented foreign workers from entering the country and arriving on time. 
  • As some construction sites relied strongly on foreign workforce, delays in the realization of some projects are expected. 
• Construction sector resilience and economic prospects
  • There are 16,000 more construction sites in 2020 compared with the same period of 2019, with the value of construction works also growing.
  • As a result, the number of employees in the construction sector grew by 10%, compared to the same period last year.
  • Big infrastructure projects will provide resilience and support the growth within the construction sector. 
• The country experienced a lockdown in the midst of economic and construction growth. With economic capital to build a resilient response to the crisis, fast recovery is expected.
• International participation in Serbia:
  • China is the leading foreign actor if we are to look at the total number of construction projects where Chinese companies are involved (60). 
  • There are over 410 involved actors in the Serbian Construction Sector, from 34 countries. 
  • The European Investment Bank (EIB) is the leading financing institution by number of projects financed (91).
  • In terms of financing, EU entities are providing the most foreign financing in the Serbian construction sector. 
  • Austrian, Chinese, Russian, Turkish and French construction companies are the most influential actors in Serbia’s infrastructure sector. 
  • There is a large number of ongoing infrastructure projects. Approximately 50% of those are financed through loans from the Export Import Bank of China (CEXIM) and built by Chinese construction companies.

Serbia outlook prior to COVID-19

• In 2019, the economy experienced a real GDP growth of 3.2%.
• Unemployment was at 10.5%, its lowest level for the past decade.
• General government debt stood at 52.1% of GDP.
• In December 2019, government projections for 2020 expected a 4.0% growth for 2020.