European cross-border work rises
By Chris Sleight14 October 2008
Last year saw a record € 64,6 billion of construction work carried out in Europe by contractors working outside their home market according to data from European International Contractors (EIC). This was a +4,5% increase on 2006, and the fourth straight year that the volume of international work within Europe has risen.
But the figures also illustrate that most construction work is carried out by domestic contractors. According to the European Construction Federation (FIEC), the value of construction work in the EU27 plus Norway, Switzerland and Turkey last year was € 1,47 trillion, so cross-border work accounted for less than 5% of the European total.
Although the volume of international work is relatively low, it has grown over recent years at a higher rate than the market as a whole. Even in 2007, when there was a slow down, at +4,5% the increase in international contracting was well ahead of European construction market growth, which FIEC put at +3,2% for the EU27.
In previous years, the rise in European cross-border work has been much more pronounced. In 2005 for example, the peak of the most recent cycle, international work increased +29,7% year-on-year, as against a European market growth of +1,2% by FIEC's reckoning.
Although growth in the cross-border construction sector slowed in 2007, the amount of work won still bodes well. According to the EIC, some € 68,6 billion of new contracts were signed in 2007, a +6,3% increase on 2006. Again this rate of growth is lower than the double-digit rises seen in 2004 and 2005 in particular, but the volume of new contracts still hit an all-time high last year.
More significantly, new contracts were ahead of the volume of work done for the fifth straight year, which is indicative of a rising market. At € 68,6 billion, new contracts stood at 106,3% of the value of work done this year, which is the biggest (in both percentage and absolute terms) that the gap has been.
So although the rate of growth slowed in 2007 for both new contracts awarded and the volume of work done, the data still points strongly to higher volumes of international work in Europe this year.
For a full analysis of the EIC's latest data, see the November issue of Construciton Europe.
More information on the EIC, including its international contracts data, is available at: www.eicontractors.de