Eurostat estimates small EU rise

By Sandy Guthrie24 May 2011

Seasonally-adjusted figures for production in the construction sector during March showed a fall of -0,3% in the Euro zone, but an increase of +1,9% in the full European Union (EU27), compared with the previous month.

The figures - first estimates from Eurostat, the statistical office of the European Union - show that in February, production decreased by -0,8% in the Euro area and rose by +1,4% in the EU27.

Compared with March 2010, output in the same month this year dropped by -4,9% in the Euro area and by -2,7% in the EU27.

Among the Member States for which data are available for March 2011, construction output rose in five and fell in seven in a monthly comparison.

The highest monthly increases were registered in the UK (+15,8%), Germany (+6,2%) and Slovakia (+5,6%), and the largest decreases in Slovenia (-7,4%), Portugal (-5,1%) and Bulgaria (-3,1%).

Separating building construction from civil engineering, building construction decreased by -0,5% in the Euro area, but increased by +1,0% in the EU27, after figures of -0,8% and +1,1% respectively in February.

Civil engineering rose by +1,9% in the Euro zone and by +2,1% in the EU27, after +0,2% and +2,1% respectively in the previous month.

In an annual comparison, again looking at the Member States for which data are available for March 2011, construction output rose in six and fell in seven.

The highest annual increases were registered in Poland (+23,5%), Germany (+16,2%) and Sweden (+6,2%), and the largest decreases in Spain (-38,0%), Slovenia (-30,8%) and Bulgaria (-19,1%).

Building construction decreased by -6,5% in the Euro area and by -4,0% in the EU27, after +3,8% and +4,3% respectively in February.

Civil engineering rose by +3,2% in the Euro area and by +3,9% in the EU27, after +1,1% and +0,6% respectively was recorded in the previous month.

In the UK, the RICS (Royal Institution of Chartered Surveyors) Construction Market Survey for the first quarter of 2011 found that rising workloads in the private commercial and housing sectors led to an overall improvement in the construction market, despite public sector activity continuing to fall.

The survey showed that overall workloads had improved during the last quarter, moving to a net balance of +6 from -5. However, it said this was largely boosted by the dramatic rise in activity seen by the private sector, with 17% more surveyors reporting that workloads in commercial construction rose rather than fell.

The private housing sector also saw a hike in activity, moving to a net balance of +8 (from -10). In contrast, however, public housing and public non-housing sectors continued to be the hardest hit, with net balances in both sectors remaining in negative territory.

Material costs continued to rise, according to RICS, with 62% more surveyors reporting a rise in prices, up from 56% during the previous three months. However, the cost of hiring tradespeople and professionals continued to slip, reflecting increased competition for jobs, which is driving down the cost of labour.

RICS chief economist Simon Rubinsohn said, "We are particularly encouraged by the indications that the private sector is not only seeing an increase in workloads but planning to raise employment.

"With impending public spending cuts, the construction industry is still likely to face significant challenges over the next 12 to 18 months, but our latest results do provide a chink of light that things are beginning to get better."

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