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New Construction market report from Business Monitor International: "Slovenia Infrastructure Report 2014" states that BMI remains bearish on the outlook for the Slovenian construction industry, premised on the poor outlook for the broader economy. Although BMI says that they were over pessimistic at -7.7% year-on-year (y-o-y) growth in 2012, which came in at -6.8% according to official statistics, BMI bearish view played out. In light of very little activity in the infrastructure sector, and poor outlooks for personal consumption and fixed investments, BMI forecasts that the industry will contract in 2013 by 4.6% and 0.5% in 2014. Tightness in the banking sector, even after recapitalisation in December in 2013, and deepening cuts will diminish scope for investment in construction projects in the medium term. Consequentially, BMI forecasts the Slovenian construction industry value to reach EUR2.53bn (US$3.04bn) through the forecast period, growing by a modest average of 2.4% y-o-y (in real terms) between 2015 and 2023.
The cautious growth in the construction industry will mainly be driven by growth in infrastructure subsector as residential and non-residential building segment is likely to remain depressed. The infrastructure accounted for just over 43% of the total construction industry value during 2011, with the transport infrastructure being considerably ahead of energy in terms of value. Transport is set to increase by a real growth rate of 1.85% y-o-y on average between 2013 and 2021, mostly driven by the developments in the port and airport sub-segments. BMI also expect energy and utilities to grow by a similar magnitude, primarily on the back the government's commitment to a mix of thermal, nuclear and renewable energy development.
The following are the key areas of growth in the infrastructure sector:
* Rejuvenating The Transport Sector: The Slovenian port of Koper continues to drive forward its plan to develop into a maritime gateway for Central and Eastern Europe. Port operator International Container Terminal Services Inc (ICTSI) is looking to make the port more attractive to shipping lines, in a project expected cost around EUR15.7mn and be concluded by the end of April 2015. Meanwhile, Aerodrom Ljubljana plans to spend EUR70mn (US$94mn) on constructing a new terminal at its Ljubljana Joze Pucnik Airport in Slovenia. Work is part of a EUR115mn (US$154mn) airport rejuvenation project which will see a new logistics centre open in 2013, with a cargo terminal following in 2015.
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