LONDON–(BUSINESS WIRE)–Technavio analysts forecast the fabricated metal market in Bosnia and Herzegovina to grow at a CAGR of more than 5% during the forecast period, according to their latest report. The market is expected to be driven primarily by demand from the global automotive industry. The fabricated metals market in Bosnia and Herzegovina is highly dependent on exports to Slovenian and German markets, and they respectively account for approximately 27% and 25% of Bosnia and Herzegovina’s total exports to member nations in the EU and Central European Free Trade Agreement (CEFTA).
The research study covers the present scenario and growth prospects of the fabricated metal market in Bosnia and Herzegovina for 2016-2020. The report discusses the major drivers that influence the growth of the market. Furthermore, it outlines the challenges faced by the manufacturers and the market at large, as well as the key trends emerging in the market.
Technavio chemicals and materials analysts highlight the following three factors that are contributing to the growth of the fabricated metal market in Bosnia and Herzegovina:
- Availability of cheap skilled labor
- Growth of real estate sector
- Increase in demand for metal doors and windows
Availability of cheap skilled labor
“The youth in the country are inclined to work in the fabricated metal products sector due to higher remuneration in this sector. There is an abundance of skilled labor in the country due to the closure of old production facilities,” says Chandrakumar Badala Jaganathan, a lead analyst at Technavio for metals and minerals research.
Also, the presence of a large number of educational and training institutions, such as Faculties for Mechanics, technical/vocational high schools, Welding Institute in Tuzla, and HTEC Center for Advanced CNC Technology ensures a constant supply of skilled labor. This abundance of skilled labor has resulted in the availability of labor at a low cost. Average wages range between USD 220 (low-skilled workers) and USD 850 (senior engineers, project managers, etc.). This availability of cheap skilled labor is a factor that is contributing significantly to the growth of the market.
Growth of real estate sector
Bosnia and Herzegovina’s extensive urbanization, a favorable tax system, huge demand from energy sector, a well-established construction sector, population growth, and strategic location (proximity to major export markets such as Germany, Croatia, and Slovenia), increase in per capita income, and low operating costs are some of the factors contributing to the growth of real estate sector in the country.
Construction companies in Bosnia and Herzegovina are known for their skill in several spheres of construction, such as design and structural engineering. The construction industry is forecast to grow at an annual rate of more than 4.5% during 2015-2024, and civil construction projects, such as the Corridor Vc project, are expected to generate a lot of opportunities for construction companies. The European Bank for Reconstruction and Development (EBRD) is expected to provide a loan of USD 67.10 million to JP Autoceste for the construction of three sections of the project. Also, Bosnia and Herzegovina, Albania, Kosovo, Macedonia, Montenegro, and Serbia have agreed on the construction of a core network of corridors to enhance their connectivity.
“The above mentioned projects and the overall growth of the real estate sector in the country are expected to contribute to the growth of the fabricated metal products market, as fabricated metal products are used extensively in constructions,” says Chandrakumar.
Increase in demand for metal doors and windows
The demand for metal doors and windows increased tremendously during 2011-2014, resulting in a 70% increase in the revenue generated by this segment. Strong demand for aluminum doors, aluminum thresholds for doors and windows, and aluminum frames from domestic and export markets was a major contributor to the growth of the segment.
There was also a substantial increase in demand for iron and steel doors and windows also, with this segment witnessing a growth of over 50% between 2014 and 2015. This is likely to provide manufacturers operating in the metal doors and windows segment with significant growth opportunities during the forecast period.
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