EUROCONSTRUCT: Weakening growth in European construction in the next two years
EUROCONSTRUCT,Europe,construction,industrial production,investment,new projects,renovation,non-residential,residential,civil engineering
Construction output amounted to nearly 1,600 billion Euro in 2018 - after five years growth still far below peak level, with relevant differences among countries.
From among 15 western EC-15 countries, 10 of them achieved in 2018 higher total construction volume than in 2007. The construction market in Spain, despite 4 growing years in a row, remains over 4 times smaller than in 2007, and by over 1/3 in Italy and Ireland.
In contrast, the level of construction in Poland in 2018 was higher by 63% than in 2007.
Current, medium-term EUROCONSTRUCT forecast indicates a weakening of the growth trends in the European construction.
EUROCONSTRUCT’s provided these figures and its industry forecast in its press release after the 88th EUROCONSTRUCT Conference.
No global crisis, but increase in growth limited to 1 - 2%
The external turmoil and turbulences in the world trade reduce the industrial production and a propensity 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 a moderate increase by 1-2% in 2020-2022.
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 the profits, funds), demographic effects (although slowing down), infrastructure conditions and the government's environmental policy.
The majority of the influencing factors are turned towards a construction output increase over the next couple of years.
On this basis, it is predicted that the rate of the production growth in the EUROCONSTRUCT area will lower in 2019 to 2.3% from 3.2% noted in 2018, and in 2020-2022 it will stabilise at the stagnation level of 1%.
All types of construction will slow down in growth
After five years of high and much faster growth in the new construction than in the renovation, following the deceleration of the new investments in 2020, these trends will be reversed in 2020-2022.
All types of construction in 2020-2022 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%,
Ireland can note the strongest cumulated growth in 2019-2022 (+30.1%), followed by Hungary (+16.6%) and Poland (+15.4%).
The negative forecasts are predicted for the largest European construction market, Germany, which after a trace increase of 0.8% in 2019 will reduce the sectoral production in 2020-2022 by more than 2%, describing development not very different than that of 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 drop in the next three year.