Hina - The Croatian construction sector is expanding at an exceptional rate, with annual growth exceeding 15%. However, sustaining this trend requires strengthening the sector to address key challenges, particularly labour shortages, experts warned at a forum on Tuesday.
The construction forum, titled "Space, Construction, the Future of Croatia - From Legislation to Realisation", was organised by the Croatian Chamber of Commerce (HGK).
Deputy Prime Minister and Minister of Physical Planning, Construction and State Assets Branko Bačić stated that the construction sector is seeing remarkable growth, with the volume of construction works increasing by more than 15% annually.
"This poses a major challenge for the sector, especially considering that we face a shortfall of around 6% of new workers each year -- between 8,000 and 9,000 are needed annually to carry out numerous strategic projects," he said.
One of the biggest challenges, he noted, is the shortage of operational workforce, which is particularly evident in post-earthquake reconstruction projects. As a result, some public procurement procedures fail to conclude with the selection of contractors due to a lack of interested bidders or bids exceeding reasonable cost estimates. Finding a solution in this context is crucial to maintaining the expected pace of reconstruction, he stressed.
Regarding rising costs in the construction sector, Bačić said that a recent meeting with industry stakeholders addressed this issue in an attempt to curb further increases, particularly in input costs. He also pointed out that one of the challenges facing the sector is the stagnation among Croatia's key trade partners, which could, in the near future, spill over into the Croatian economy and, consequently, the construction industry.
Ministry's key activities
Bačić presented the Ministry's key activities, focusing on housing policy, legislation, new laws, the continuation of post-earthquake reconstruction and potential regulation of construction material prices. These activities, he explained, are grouped under a common framework called 4D.
The first D stands for demography, with the government set to adopt the National Housing Policy Plan until 2030, the country’s first overarching strategic housing document. The second D relates to decarbonisation, as part of the Ministry's contribution to energy self-sufficiency and carbon reduction. The third D concerns digitalisation, particularly the digital processing of spatial planning data. The fourth D refers to strategic documents, including the National Housing Policy Plan, new construction laws, spatial planning regulations and energy efficiency legislation for buildings.
Bringing skilled domestic workers back from abroad
HGK President Luka Burilović said that the construction sector currently employs around 150,000 people and accounts for approximately 6.3% of GDP. One of its biggest challenges, he said, is the labour shortage.
"We cannot rely solely on foreign labour; we must strive for national consensus and do everything possible to accelerate efforts to bring back our workers who have left for jobs abroad. Our goal must be to restore a skilled domestic workforce," he said. He also emphasised the importance of making use of EU funding.
Higher wages needed to retain workers
Branislav Brizar, founder and majority owner of construction firm ING-GRAD, said that retaining workers requires higher wages.
His company has increased salaries for technical staff by 60% to 80% over the past four years. This, he noted, has yielded positive results, with workers returning from abroad, particularly from Germany, where many had moved during the economic crisis.
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