Press Release

88th EUROCONSTRUCT Conference
29th December, 2019

New challenges for European construction after 2020

Construction output amounted to around 1,600 bn Euro in 2018 in the 19 EUROCONSTRUCT countries. Even after five years of continuous growth this is still far below the peak before the 2008 financial crises. This can be mainly attributed to the development of Spain and Italy while on the other hand 10 out of 15 western European countries achieved a higher total construction volume in 2018 compared to 2007. The construction market in Spain remains more than four times smaller than in 2007, despite four consecutive years of growth. In Italy construction output shrank to one third. Also, Ireland faced such a drastic decline. By contrast, the Polish construction output in 2018 was 63% higher than in 2007. National differences remain therefore high.

The current medium-term EUROCONSTRUCT forecasts show further expansion in European construction, but growth will decline. Especially turbulences in world trade are reducing industrial production and the propensity to investment in Europe. The most recent macroeconomic forecasts do not assume a global crisis, but annual GDP growth between 1% and 2% towards 2022 will be relatively low.

The construction sector profits from economic factors (like the current sound purchasing power of private households, favourable financing conditions and higher corporate profits), the demographic development (albeit slowing), the continuous need for infrastructure and stronger/new environmental policies. The majority of influencing factors points towards a lower increase in construction output in the coming years.
 
After 3.2% in 2018, construction growth in the EUROCONSTRUCT area is forecasted at 2.3% in 2019 and it will stabilise at around 1% in 2020-2022. Also, a trend reversal can be observed. The new construction sector - which has grown strongly over the past five years - is beginning to weaken, while the renovation market has a much more favourable outlook.  

In the period 2020 to 2022 all main construction sectors will face a decline in average annual growth. Civil engineering is expected to grow by 2.2%, non-residential by 1.0% and residential construction by only 0.5%. From a regional perspective Ireland shows the strongest cumulative growth 2019 to 2022 (+30.1%), followed by Hungary (+16.6%) and Poland (+15.4%).

The largest European construction markets face the least favourable development. The expansion of the construction market in Germany is expected to stop after 2019 (+0.8%). A cumulated decline by slightly above 2% in the period 2020 to 2022 is forecasted.  Especially commercial investment, namely in the area of new commercial buildings and in the infrastructure sector will be low. Also the French construction outlook is less favourable, even if the decline is expected to be weaker. Even worse is the outlook for the Nordic countries, Finland and Sweden, where production levels are expected to fall in the next three years (on average).
 

Date.UTC(2016,0,1) 2.0 2.3
Date.UTC(2017,0,1) 2.5 3.9
Date.UTC(2018,0,1) 2.0 3.2
Date.UTC(2019,0,1) 1.3 2.3
Date.UTC(2020,0,1) 1.4 1.1
Date.UTC(2021,0,1) 1.4 0.9
Date.UTC(2022,0,1) 1.5 1.1
Date.UTC(2016,0,1) 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Date.UTC(2017,0,1) 103.3 101.7 105.7 102.1 103.9 102.2 113.7 100.5 104.0 105.7 109.0 105.2 107.4 101.2 106.1 103.6 103.4 126.9 109.2 103.8 109.5 103.9
Date.UTC(2018,0,1) 107.1 104.5 110.3 105.3 107.4 104.0 127.5 102.3 111.0 104.6 116.9 112.0 106.5 102.9 106.4 106.4 110.6 152.1 124.6 112.1 123.5 107.2
Date.UTC(2019,0,1) 109.9 107.4 112.0 103.0 109.6 104.8 140.9 105.0 115.0 109.5 122.6 117.1 106.2 103.6 107.2 108.4 114.2 172.4 134.7 112.3 132.5 109.7
Date.UTC(2020,0,1) 111.3 111.6 113.5 102.7 110.0 104.1 149.8 107.2 115.6 111.8 127.0 120.8 104.2 103.2 108.7 109.5 116.1 181.6 140.4 113.5 137.3 110.9
Date.UTC(2021,0,1) 112.8 115.4 114.9 99.2 109.2 103.3 161.3 109.0 117.1 113.7 130.8 123.2 103.7 103.5 111.4 110.4 118.1 187.0 141.3 115.6 139.1 111.9
Date.UTC(2022,0,1) 114.4 116.7 116.2 98.5 110.8 102.6 165.9 110.7 120.2 117.6 134.3 124.0 106.7 103.7 113.6 111.6 121.0 177.4 143.9 115.1 140.2 113.1

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PRESS CONTACT

88th EUROCONSTRUCT Conference
PAB – Polish Construction Research & Forecasting Institute 
Mr. Mariusz Sochacki
poland@euroconstruct.org