Europe Biannual Construction Market Report 1Q/2Q 2025
Slovakia
Top opportunities
Commercial real estate: Growing demand for mixed-use developments and modern office spaces in urban centres.
Government and municipals: Increased investment in public infrastructure projects and urban development initiatives.
Healthcare: Focus on modernising hospitals and expanding medical facilities to improve healthcare services.
Industrial, manufacturing and logistics: Strong growth in warehousing and manufacturing projects, driven by Slovakia’s industrial base and strategic location.
Top trends
Sustainable construction/Net Zero: The Slovak Republic is prioritising sustainable construction practices, focusing on energy-efficient designs and renewable materials to align with EU climate goals and reduce carbon emissions.
Use of digital tools, data and artificial intelligence: The construction sector is adopting advanced digital tools and AI to enhance project management, optimise designs, and improve overall efficiency, reflecting a growing trend in modernisation.
Local economic indicators
Slovakia’s year-over-year (YoY) gross domestic product (GDP) growth for 2024, as reported by The European Commission, is expected to have grown by 2.2%, driven by increases in private and public consumption. However, private consumption may face headwinds in 2025 due to an increase in VAT and the expiration of energy subsidies for households, despite continued wage growth. Public investment is expected to rise, supported by the deployment of EU Resilience and Recovery funds (RRF). GDP growth is forecast to continue improving with figures of 2.3% in 2025 and 2.6% in 2026 predicted. When viewing GDP compared to the previous period, QoQ, Eurostat reports that Slovakia experienced an increase of 0.3% between 2Q and 3Q 2024.
Eurostat also reports that in 2024, the construction industry’s gross value added, which measures its contribution to Slovakia’s overall GDP, remained stable at approximately 7.8% of the total GDP.
Eurostat's Harmonised Index of Consumer Prices (HICP) declined to 3.1% in 2024 due to government measures to cap energy prices for households. However, with these interventions set to expire in 2025, energy prices are expected to return to market levels, causing the HICP to rise to 5.1% in 2025 before stabilising at 3.0% in 2026.
Unemployment is forecast to improve gradually, falling from 5.5% in 2024 to 5.3% in 2025 and 5.2% in 2026, as economic recovery continues to stimulate labour demand.
Construction materials
An analysis of the industrial producer price index reveals a significant month-over-month (MoM) price increase in the manufacture of glass at 14.6% as well as strong price recoveries in wood at 7% and steam and air condition supply at 4.2%. Despite this strong MoM decline, when viewing YoY figures we can see that glass has increased by 69.2% - standing out from all other sectors. When indexing for June 2022, when oil prices peaked due to the Russia-Ukraine conflict, we can see that there has been a very substantial increase in the price of glass, 166.7%, with relative stability seen across the majority of sectors and substantial price recovery of 25.7% seen in wood. The table below, with data from the Statistical Office of the Slovak Republic, shows the change in cost indices MoM, YoY, and indexed.
Market outlook
In Slovakia, the construction confidence indicator, CCI, showed a steady decline in the latter half of 2024, dropping from its highest point of -0.5 in July to -14 in December. This negative trend was primarily driven by a significant drop in employment expectations, which fell from 15 to -15, though it was slightly offset by an improvement in order books, which rose from -16 to -13 over the same period. However, it is important to recognise that a decrease in the CCI in countries with colder climates during the winter months is also part of a cyclical trend influenced by adverse weather conditions, which slow order books and reduce work expectations.
The three most prominent factors limiting building activity in Slovakia are a shortage of labour, insufficient demand, and price expectations. Shortage of labour and insufficient demand have been persistent issues throughout 3Q and 4Q 2024, with averages of 33.3 and 32.8, respectively, across the period and a reported figure of 32 for both in December. In contrast, price expectation figures were relatively low during 3Q, averaging 10.3, but have risen sharply in 4Q to their current December level of 30. Despite the poor figures reported in the second half of 2024, Slovakia's strong GDP, inflation and unemployment forecasts for 2025 and 2026 should hopefully be reflected in future CCI reporting.
Local office input
The Slovak construction market in 2025 is set for significant transformation, driven by the introduction of a transaction tax and the implementation of a new construction law, both of which will influence the sector’s recovery and future growth. The transaction tax, effective from January 1, 2025, will impose new financial obligations on construction companies, requiring careful financial planning to manage these additional costs. At the same time, the new construction law, effective April 1st, 2025, aims to streamline and accelerate the permitting process by merging zoning and construction proceedings into a unified, fully electronic system, reducing bureaucracy and shortening permit issuance times, though the transition may involve a learning curve for market participants.
The law also introduces stricter oversight of unauthorised constructions, which must be legalised or removed within deadlines. In addition to these regulatory changes, companies will need to address the ongoing challenge of a shortage of qualified labour, making investment in training and recruitment vital. Increased public investment, supported by the EU Recovery and Resilience Plan, presents opportunities for infrastructure, hospital modernisation, and urban development, while the growing focus on sustainability will require the adoption of eco-friendly solutions and energy-efficient materials, as well as a reduction in the carbon footprint of projects. Overall, 2025 marks a period of change and opportunity for the Slovak construction market, with potential for growth if companies adapt to evolving regulations and trends.
Gleeds recommends revising previously set project budgets to present-day figures based on local statistical information and our own internal data. Additionally, we advise investors to consider inflation contingencies in their budgets as materials and labour shortages remain unpredictable.
Westend Gate, Slovakia, Bratislava — Gleeds provided Construction Management and Project Management services.
