European construction through the worst

09 December 2009

European construction output is expected to fall -2,2% in 2010, following a -8,4% drop in 2009, according to the latest figures from Euroconstruct. A recovery is unlikely before 2011 and growth will not return to pre-recession levels until 2012.

According to the forecasting group 2009 has been the worst for the construction market in the Euroconstruct area for more than 10 years and the recession has hit nearly all 19 member countries.

With the exception of Switzerland (+3,3%) and Poland (+5,3%) all other member countries experienced negative growth.

The greatest declines in construction output were reported in Spain (-21,5%) and Ireland (-32,3%) but Finland and the UK have not fared much better with falls of -14,2% and -12,6% respectively.

Portugal, Slovakia and Italy also performed poorly, with construction output declining more sharply than the Euroconstruct average.

The downturn is attributed to a -22,5% decline in new residential construction as well as a -12,7% decline in new non-residential construction - a segment which still grew in 2008. Civil engineering is the only market segment which has not declined this year.


Next year, total construction output is not expected to decline any further after the strong downturn in 2009, but construction output is likely to stagnate until 2012.

New residential and non-residential sectors are expected to continue their downturn, with recovery to pre-recession levels unlikely before 2012.

Meanwhile, construction markets in Poland, Slovakia and Sweden are set to grow the most in 2010 and 2011.

In a statement Euroconstruct said the phasing out of the stimulus packages, alongside necessary consolidation of public finances, will have a negative impact on construction activity financed by the public purse in the coming years.

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