Concentration Of Construction Industry In Croatia For The Period 2004-2013

Abstract

A constant decline of the construction industry in the Croatian GDP is very concerning. The Croatian construction industry is facing with a significant decline of the whole sector. The share of the construction industry within the Croatian GDP was 7.8 percent in 2008. In 2013, that number declined to a devastating 4.4 percent. The concentration ratio shows significant fragmentation. The number of employees shows a negative trend, the number of companies is growing. A study has shown that Croatian construction industry is strongly fragmented, and has been such even more so after the economic crisis of 2008. Until 2008, the construction industry in Croatia showed constant growth. However, soon after we could notice a decline in employment, concentration ratio of the biggest companies and total revenue decline. Nevertheless, since 2008 there have been strong changes in the sector. Within the context the construction sector within Croatia, this paper mainly focuses on the level in the industry within the past ten years. From 2004 to 2008, shares of construction in the GDP increased from 4.2 to 7.3 percent. Results from this increase have also spread on the employment, which shows an increase of 61.1 percent. In 2004, there were 6471 registered construction companies with 84642 employees working in the sector. In 2013 there were 11989 companies employing 77129 people. The 2014 construction industry has fallen on its knees and is continuing to fall. Data from 2013 shows the share of construction in the GDP to be 4.2 percent. Industrial concentration is measured by the 4 ; 8 ; 20 and 30 construction company concentration ratio. The industry is characterized as strongly fragmented: in 2008, 4 biggest companies had a share of 2.95 percent, and in 2012, the share of 4 biggest construction companies held 1.51 percent of total revenue. The construction industry has a meaningful impact on the Croatian economy, since it is traditionally an important and strong sector. We found that strategic alliances and government incentives can have significant impact on forming the steady ground for a better future in the Croatian construction companies.