Boston, MA -- (SBWIRE) -- 01/09/2014 -- Slovakia appears to be stabilising its economy and as such we have upwardly revised our forecasts for 2014. We forecast the construction growth in 2013 will return into positive figures at 0.8% yo- y. For 2014, we expect this growth to be maintained - stronger growth being subdued as private investors wait to see how whether economic recovery will fully take hold. Weak demand is the major risk both in the infrastructure and residential and non-residential sectors. That said, European money will likely continue to support investment and government spending has been little impacted by austerity measures. As such, although our outlook is still muted, there is an improving outlook for the construction industry over 2014.

Key developments informing our forecast include:

Transport sector revival: More Public Private Partnerships (PPPs) have been awarded for the development of Slovakia highways. Over 2013 NDS awarded a contract worth EUR330mn (US$422.93mn) to a consortium of Doprastav, Strabag, Vahostav-SK and Metrostavwas to construct a 12km stretch of motorway in Slovakia. Under the contract, the consortium will construct the Svrcinovec-Skalite section of the D3 motorway. The EU and the Slovak government would provide funding for the project. The construction work is expected to be carried out for about three years. Also, the Government of Slovakia approved refinancing of the R1 Expressway project in Slovakia, on October 23 2013. A project bond, which will mature in 2039, will be issued in place of the original bank loan. The total worth of the project bond will be EUR1.25bn (US$1.72bn).

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Nuclear Future: Slovakia has held fast on its nuclear plans. In April 2012, the government pledged to speed up the new nuclear power plant at Bohunice and to decide upon proceeding early in 2013. The Slovak government in October 2013 said that it will hold talks with Russian company Rosatom about the firm's participation in the planned construction of the new nuclear power plant. Rosatom could replace Czech energy giant CEZ which is planning to back out of the project. Meanwhile, two new nuclear plants, Mochovce 3 & 4, have run into difficulties after a court prevented their completion.

Housing boost: In its 2012 budget, the government allocated around EUR145.9mn for the Slovak State Housing Development Fund (SFRB), EUR73.5mn of which was set aside for the construction of flats that are to be rented. State support for the sector should also see private sector investors look at take advantage of a recovery in private sector consumption.

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