FIEC predicts –5,2% fall in EU construction

This year's edition of Construction Activity in Europe from the European Construction Industry Federation (FIEC) forecasts a -5,2% fall in construction output in the EU in 2009.

Among the countries expected to suffer the biggest falls this year are hitherto booming markets like Finland (-13,3%) Romania (-12,8%) and Slovenian (-12,0%). A handful of countries are expected to see an increase in construction activity this year, but these rises will be marginal. The biggest growth is expected to be in the Czech Republic (+1,8%).

The building sector is expected to suffer a heavier fall than the civil engineering market, with a -6,9% decline forecast. Within the building segment, house building will see the sharpest fall at -8,4% across the EU, with double-digit falls being seen in Denmark, Romania, Sweden and Slovenia, Spain and the UK. No country in Europe is expected to see an increase in house building this year.

The only bright spots in the housing industry are to be found in the repair and maintenance segment, which is set for only a -3,3% drop compared to the -14% fall expected in new house building. As far as repair and maintenance of residential buildings is concerned, several countries will see good growth in activity this year, including Finland (+5,0%), Sweden (+7,5%) and Slovenia (+7,1%).

Non-residential construction is expected to fall -5,1% across the EU in 2009. Privately funded work will be hit the hardest with a -7,0% drop, while Public non-residential work is set for a +1,5% increase according to FIEC.

The civil engineering sector is also expected to stay in positive territory this year, with FIEC forecasting a +0,5% rise in output. Most EU countries will see a rise in activity this year, but the overall figure for Europe will be subdued due to falls in major markets such as France and Italy.

The decline in construction activity is expected to have a profound impact on employment in the sector. According to FIEC at the peak in 2007 total employment in the EU construction sector stood at 16,1 million workers. This fell to 15,9 million workers in 2008, and a further fall to 15,1 million is expected this year - a loss of just under 1 million construction jobs in two years.