Construction Chamber of the Slovak Republic has raised serious concerns about the new building law, warning that instead of streamlining construction processes, it could introduce new complications and risks. According to Chamber President Ivan Pauer, the law was not developed as initially promised by its key creators and may ultimately harm small and medium-sized businesses in the construction sector.

The new Building Act, which has been in preparation for over a year, aims to accelerate construction proceedings and facilitate rental housing development. However, its passage has been met with controversy, with lawmakers admitting that while they misjudged the preparation time, rejecting the law would have led to a crisis in the sector. According to Minister Jozef Ráž, without its approval, authorities would not have been able to issue building permits or collect necessary fees.

Despite these assurances, Ivan Pauer argues that the law poses a serious threat to smaller construction firms and sole traders. He highlights a particularly problematic provision introducing “Dedicated Buildings”, which he claims will disrupt the traditional classification of buildings and put smaller firms out of business. As a result, many workers could be forced into unemployment and state support.

Pauer believes that if the government wanted to classify certain buildings differently, it should have introduced “Special Buildings” designated for state security. He explained that globally, such buildings fall under strict security regulations for designers and contractors but remain separate from standard construction laws. Alternatively, he suggested that these projects should be developed by state-owned companies, ensuring better oversight and efficiency.

The Chamber also criticizes the new law’s reliance on fully electronic communication between stakeholders, citing costly failures in similar projects abroad. Pauer pointed to hundreds of millions in losses in the Czech Republic, arguing that Slovakia is now following the same risky path. He believes that an electronic application for “Construction Consent” would be sufficient, rather than the ambiguous term “Construction Permit” introduced in the new law.

The biggest concern, according to Pauer, is the introduction of a provision that automatically approves construction if the building authority fails to respond within 30 days. He warns that this rule is highly exploitable by investors, regardless of the reasons for the authorities’ silence. Pauer argues that lobbying by large construction companies influenced the law, sidelining traditional experts and lawmakers who have failed to draft a stable and functional building law since 2006.

Looking ahead, Pauer predicts that the law will require multiple amendments before full implementation. Without accompanying regulations, he believes the law will eventually be scrapped and rewritten entirely, this time with real industry experts involved in its drafting. According to Pauer, Slovak citizens and the state have once again lost the opportunity to introduce an effective, long-term system for managing construction and urban development.

Source: SITA

The Slovak construction industry saw a year-on-year production increase in December 2024, yet the overall annual performance ended with a 5% decline. The sector struggled throughout the year, with all components of domestic construction output recording a downturn, particularly in engineering projects, which saw a double-digit decrease. New construction and repair works also slowed, and despite modest improvements in the final months, the sector failed to recover from the broader downturn.

In December 2024, construction production reached EUR 752.7 million, marking a 4.3% year-on-year increase. However, after seasonal adjustments, production was down 1.2% compared to November. Domestic construction production posted positive results in only three months of 2024, with December being the second-best performing month.

The largest component, new domestic construction, grew by over 12%, marking its best performance of the year. However, domestic repair and maintenance works fell by nearly 15%, continuing to weigh on the sector. Domestic construction accounted for over 90% of total industry performance, with building construction rising for the second consecutive month, up 7.7% in December. Meanwhile, engineering construction, including highway projects, remained weak, with a 2.4% year-on-year drop.

International construction activity saw a 2.9% increase in December, although its share in total sector production fell below 10%.

Full-Year 2024 Construction Performance

For the entire year, Slovak construction output totaled nearly EUR 7.5 billion. While the sector produced higher values in current prices, its real performance declined by 5% when adjusted for inflation. This marked the second consecutive year of contraction, following a 0.2% decline in 2023.

The downturn affected all areas of domestic production, particularly new construction, renovations, and expansions, which declined by over 6%, while repair and maintenance works dropped by nearly 5%. By construction type, building construction fell by more than 2%, while engineering projects saw a sharp 12% drop.

Despite domestic challenges, construction activity abroad improved slightly, recording a 0.9% year-on-year increase. However, this segment still accounted for less than 11% of total Slovak construction output.

While the sector ended the year on a stronger note, sustained declines in domestic infrastructure projects and maintenance work remain key concerns for the industry heading into 2025.

Source: Statistical Office of the SR