Euroconstruct expects growth trends to weaken in European construction

Following five years of growth, construction output amounted to nearly € 1 600 bill. in 2018, although there were considerable differences between the countries.

Of the EC-15 countries, ten of them achieved a higher total construction volume in 2018 than in 2007. Despite four years of growth in a row, the construction market in Spain remains at just a quarter of its 2007 level, while in Italy and Ireland it has reached just a third. In contrast, the level of construction in Poland in 2018 was 63% higher than in 2007.

The current, medium-term Euroconstruct forecast indicates a weakening of growth trends in European construction. External turmoil and turbulences in world trade are reducing industrial production and the willingness to invest in Europe. The overall economic situation is still considered positive, even if it is worsening. The latest macroeconomic forecasts do not predict a global crisis, but only a moderate increase by 1 to 2% in the years 2020 to 2022.

The favourable conditions for the development of construction result mainly from the economic aspects (purchasing power of the households, financing conditions, economic growth and increase in profits, funds), demographic effects (although slowing down), infrastructure conditions and the governments’ environmental policy.

The majority of the influencing factors are turned towards an increase in construction output over the next couple of years.

On this basis, Euroconstruct predicts that the rate of the production growth in the Euroconstruct area will decline from 3.2% reported in 2018 to 2.3% in 2019, and in 2020 to 2022 it will stabilize at the stagnation level of 1%.

After five years of high and much faster growth in new construction than in the renovation, following the deceleration of new investments in 2020, these trends will be reversed in the years 2020 to 2022. All types of construction in 2020 to 2022 will face a reduction in the average annual growth rate, including civil engineering to 2.2%, non-residential by 1% and residential construction by 0.5 %. The strongest cumulated growth in 2019 to 2022 (+30.1%) is expected for Ireland, followed by Hungary (+16.6%) and Poland (+15.4%).

Negative forecasts are predicted for the largest European construction market, Germany, which after a slight increase of 0.8% in 2019 will reduce the sectoral production in 2020 to 2022 by more than 2%. This development is not very different from that in France, but associated with a decrease in the non-residential investments, namely for the new non-residential buildings and the infrastructure sector.

Much more negative are the expectations for the Nordic countries, namely Finland and Sweden, where the level of output is expected to fall in the next three years.



Related articles:

Issue 2019-1 Euroconstruct

Construction output growing in all 19 Euroconstruct countries

Thanks to a simultaneous construction output growth in the 19 Euroconstruct countries for the first time since years, 2017 recorded a growth peak of 4.1% (volume). The construction market should...

Issue 2016-7

81st Euroconstruct Conference on European construction markets

The first 2016 Euroconstruct Conference took place in Dublin/Ireland on 9 and 10 June 2016. The conference is part of Euroconstruct’s bi-annual series on European construction markets. Beside...

Issue 2018-1 Euroconstruct

Construction sector grows in all 19 member countries for the first time in 2017

Construction volume in the Euroconstruct area has grown by an estimated 3.5?% in 2017. The strongest stimuli once again came from residential construction. Developments in 2017 are remarkable for...

Issue 2017-1 82nd Euroconstruct Conference, Barcelona/Spain

European construction sector will keep growing

The previous Euroconstruct conference was held a few days before the referendum in the UK, so the Barcelona conference in November 2016 has provided the first opportunity to assess the repercussions...

Issue 2017-4 83rd Euroconstruct Conference

Poland, Norway and Sweden – strong market performers in European construction production

The recovery of the European economy has boosted growth in construction production. In 2016, construction output increased by 2.5?%, 0.5%-point stronger than expected half a year ago. The volume of...