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Construction companies expecting drop in sales of 3.7 percent in 2012

Managers of Slovak construction companies are expecting a cut in sales next year, according to the quarterly analysis of the Slovak construction sector carried out by CEEC Research in November. According to the report, sales should go down by 3.7 percent year-on-year, the TASR newswire reported.

Managers of Slovak construction companies are expecting a cut in sales next year, according to the quarterly analysis of the Slovak construction sector carried out by CEEC Research in November. According to the report, sales should go down by 3.7 percent year-on-year, the TASR newswire reported.

“In comparison, construction companies in August were anticipating growth in sales of 1.8 percent [in 2012]," states CEEC Research adding that estimates for 2013 are more optimistic with an increase of 2.5 percent expected.

The current low demand for construction work has affected the prices of commissions, which in some cases have fallen below the level of expenditures. Competition on the construction market is becoming tougher, which has had a negative influence on business morals as well, the report states.

"Regarding the drop in the market for construction machinery, competitive behaviour has escalated to the edge of acceptable ethics, which should be among the basic elements of doing business," said executive director and regional manager of Terrastroj Peter Knap as reported by TASR.

According to the analysis, construction companies have reacted by cutting costs, halting investments, imposing pressure on suppliers, and looking for commissions that they haven't sought in the past.

"Ninety-one percent of large companies have declared their interest in any kind of commission,” claims CEEC Research. “This has resulted in market segmentation disappearing, which has caused problems for small and medium-sized companies.”

The quarterly analysis of the Slovak construction sphere is based on structured phone calls and was carried out on a sample of 100 construction companies doing business in Slovakia, TASR wrote.

Source: TASR

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