Executive Summary Construction sector indicators

• Slovenian construction industry was affected significantly by the 2008 global economic crisis, managing to show a gradual recovery in indicators such as turnover, number of persons employed and the number of enterprises registered from 2013 onwards.
• From 2017 to 2019, Slovenian economy was expanding rapidly, with construction being one of the leading sectors. Intensive road maintenance work was under way to make up for the backlog of recent years when the state reduced road maintenance below the required minimum, with extensive renovation works undertaken for railways as well.
•  In 2020 the Slovenian economy experienced a slowdown due to the 2020 COVID-19 pandemic. 

Based on data from Slovenian Statistical Office

• The value of construction put in place in the first five months of 2020 was lower with 3.2% compared to the same period of the previous year.
• May 2020 marked the third consecutive monthly decrease for the value of construction put in place over the past 5 months.
•  There are 22% less dwellings planned for the first half of 2020 compared to the same period of 2019. 
• The total floor area of all buildings planned in the first half of 2020 was a little less than 609,000 m2, which is 23% less than in the first half of 2019.
• The number of building permits for new constructions issued in June 2020 decreased by 19% in comparison with June 2019. However there are also signs of recovery as the value increased 12% compared to May 2020.

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Economy indicators

• The economic sentiment indicator (ESI)^[1] for July 2020 decreased by 24.3 %. Compared to July 2019, with construction influencing the decrease in the sentiment indicator at the annual level by 0.8 %.
• In July 2020 the construction confidence indicator was 5 %. higher than in June 2020 and 16 % lower than in July 2019. It was also 4 % above the long-term average.
• The economic sentiment indicator (ESI) for 2020 is improving m-o-m (June to July), but is still 18.1 % below the long-term average.

Policy response to the crisis

• • The Slovenian authorities transposed into the national legislation the guidelines issued by the European Commission on 24 July 2019, regarding public procurement and the participation of third country bidders. It was done to address the lack of level playing field between EU and non-EU bidders, goods and services.
  • The latest changes in  Slovenian legislation regarding the restriction of the participation of providers from third countries were made by the Intervention Act IZOOPIZG^[2]. The act applies from May 29 2020 and is valid until 31 December 2021. 
  • Article 11 of the Intervention Act IZOOPIZG refers to the application of the EU Commission guidelines on the participation of third country bidders and goods in the EU public procurement market (OJ C 271, 13.8.2019, p. 43) which applies to public procurement procedures; and determines the obligation of all construction contractors and subcontractors in the construction industry (Eurostat NACE classification, group F) to apply to  the Collective Agreement on Construction Activities with the same rights for employees as employees of the Collective Bargaining Agreement.
  • As part of the intervention legislation, public procurement in Slovenia is amended by two other laws: “ZIUZEOP”^[3] & “ZIUOOPE”^[4]. 
  • ZIUZEOP - changes the limit values in general for the application of Public Procurement Act (ZJN-3)
  • ZIUOOPE - determines new amounts for small value contracts and determines the application of the corrective mechanism in relation to Article 67 of ZJN- 3.
  • A new government initiative to kick-start the Slovenian economy was announced on 18 June 2020 by the Slovenian Environment Minister Mr. Andrej Vizjak.
  • The initiative comprises a list updated on an ongoing basis containing more than 187 key investments worth EUR 7.7 billion that will be given priority treatment in administrative procedures.
  • Furthermore, the initiative will see important projects initially halted due to permits, come to life as a result of the prioritization of projects and acceleration of granting permits,  following the creation of a special task force featuring representatives of agencies and other offices which are key in the process of obtaining permits.
  • In terms of financing, Slovenia will receive a total of 10.5 billion EUR  from the EU for the period between 2021 and 2027 (3 billion euro for cohesion policy; 1.6 billion euro for the common agricultural policy; 2.1 billion euro in grants and 3.6 billion euro in loans under the Next Generation EU plan for economic recovery following the novel coronavirus (COVID-19) crisis).

Wrap up

• Slovenian economy was seriously affected by the Covid-19 health crisis. There is a traceable impact on the construction sector with a decrease across all relevant indicators.
• Last two months (June and July) show signs of recovery, with indicators registering higher values than for May or April, nevertheless these values are still lower when compared to the same months of 2019.
• Slovenian government took a series of important measures that aim to level the playing field in the construction sector in Slovenia, support local and regional economic recovery and invest EU funds efficiently into the national economy.

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