FIEC sees Europe recovery

By Sandy Guthrie15 June 2016

A 2.4% recovery in activity in the overall EU construction industry in 2015 is being reported by FIEC (the European Construction Industry Federation), while it is forecasting another increase for 2016 – but only at 2.1%.

Vice president Jean-Louis Marchand, who is responsible for economic issues at FIEC, said, “After reaching the bottom in 2013, activity is slowly recovering in the construction industry.

“In 2015, the increase in activity has finally been slightly higher than we had initially forecast and the trend is expected to continue in 2016, but at a slower pace.”

He added, “There are economic and political uncertainties, such as, for example, the referendum in the UK, the asylum-seekers issue and the geo-political situation in the Middle-East, that are hindering investments – and there cannot be growth without investment.”

Marchand said, “We therefore welcome the decision to prolong further the Juncker Investment Plan, which has shown quite positive results so far, and we will discuss it with the Vice President of the European Commission, Jyrki Katainen, during our forthcoming General Assembly on 17 June”.

Marchand said that overall, EU total construction output amounted to €1.24 trillion in 2015 – an increase of 2.4% compared to 2014.

He said, “This is positive, but we will still need time to catch up with the pre-crisis levels.”

According to FIEC’s statistics, behind the overall figure for the EU, disparities between Member States remain significant, with Sweden’s figure of a rise of 10%, leading, and Greece falling 15.1% at the bottom.

FIEC said that the increase in activity in 2015 was mainly down to two sectors – civil engineering which was up 6.2%, and new housebuilding up 3.5%. The non-residential sector remained weak at -0.5%, both private at +0.3% and, in particular, public which fell 2.4%.

Rehabilitation and maintenance activity maintained relatively stable development before and throughout the crisis at 2.6% in 2015, which FIEC said had an important cushioning effect for the entire construction sector. It added that this trend was expected to continue in the near future.

Overall, civil engineering activity in 2015 increased with a high growth rate of 6.2%, said FIEC, which it added was mainly boosted by significant infrastructure investments in the UK, largely counteracting less positive developments in several other countries.

The level of employment in the construction industry increased slightly, up 0.9% in 2015. However, FIEC said it should not be forgotten that over the period from 2008 to 2014, the sector lost more than 2 million jobs.

It pointed out that altogether, construction provided jobs for 14.1 million people, which represented 6.4% of Europe’s total employment. This rises to 42.3 million jobs when including the indirect employment generated in related sectors, according to the multiplier effect estimating that one job in construction equals two further jobs in other sectors – three in total.

FIEC said that in spite of the troubled period, the construction industry remained one of the major engines of Europe’s growth. It represents 8.5% of EU GDP and 3.2 million enterprises – the vast majority of which are SMEs (small and medium-sized enterprise).

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