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Some construction firms to increase prices

The prices for construction works may increase by 9 percent on average.

(Source: Sme)

Nearly one-third of construction firms in Slovakia will increase the prices of their work, mostly to create or increase their profit.

Moreover, one-fifth of all firms expect their margins to grow, while only one-tenth says the margins will decrease. This stems from the latest analysis of the Slovak construction sector for the first quarter of 2016 published by the CEEC Research company.

The company prepared the analysis based on interviews with more than 100 construction firms in Slovakia. According to the company’s head Jiří Vacek, mostly big companies building highways and expressways are considering hiking the prices this year, the Sme daily wrote.

The analysis suggests that 27 percent of companies expect their prices to rise by 9 percent on average. On the other hand, 71 percent want to keep prices at the current level and 2 percent consider decreasing them, the TASR newswire reported.

The exception are big companies, which plan to increase prices by only 3 percent, and also companies dealing with engineering projects, where the increase may be as high as 13 percent.

The main reason is that they want to generate profit, which in many cases fell to a minimum during the crisis years. Some firms even reported a loss, according to CEEC Research. Another reason is the increase in prices for works carried out by subcontractors or the increase in other costs.

The main reason for big companies is the increase in works carried out by subcontractors, TASR wrote.

Heads of construction companies also said that the margins currently amount to 5 percent. The margins of companies dealing with engineering constructions amount to 10 percent, while in small and medium-sized companies it is 17 percent and in structural engineering it is 16 percent.

Topic: Highways


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