Positive view from Euroconstruct
By Sandy Guthrie07 December 2015
The growth rate of total construction output predicted by Euroconstruct for 2015 has been revised downwards from the 1.9% suggested at its Warsaw, Poland, conference in the summer, to 1.6% for the region it covers.
At its latest conference in Budapest, Hungary – the 80th conference to be held by the network of construction forecasters – Euroconstruct predicted a GDP (gross domestic product) growth of 1.9% for 2015 in its 19 countries, up from 1.8% forecast in summer.
For both 2016 and 2017, a 2% GDP growth is now being estimated, compared to the 2% and 1.7% forecast in Warsaw. For 2018, a 1.9% hike is expected in GDP in the Euroconstruct region.
It reported that in 2015, no country was set to register a contraction in GDP, while Italy and Finland saw a drop in GDP in 2014.
At the Budapest conference, the growth rate of total construction output for 2015 has been revised downwards from 1.9% to 1.6%. For 2016, a record growth rate of 3% was forecast, as opposed to 2.4% in Warsaw. For 2017, there was no big revision with 2.7% projected rather than 2.6%.
For 2018, total construction output in the Euroconstruct region was estimated to show a growth of 2%.
Euroconstruct estimated the value of construction output to be €1.41 trillion in 2016 and €1.45 trillion in 2017. It said the level of construction activity should reach €1.48 trillion by 2018.
To put this in perspective, it said that in 2007, total construction output of the Euroconstruct countries was €1.53 trillion.
It said that when it came to construction activity, all 19 Euroconstruct countries were looking at an upturn in the forecast period of 2016 to 2018.
In 2015, Ireland (up 10.6%), Slovakia (up 10.3%), Czech Republic (up 7.4%), Netherlands (up 6%) were booming. In 2016 to 2018, Poland would register growth of 7% and Ireland 9% yearly in total construction output, it predicted.
Compared to a similar table at the Warsaw Euroconstruct Conference in the summer, construction output in 2016 will be more positive than predicted, it said.
“Starting from the deepest 2012 and 2013 years, construction output growth of 2016 seems to be very positive, regarding all 19 countries of Euroconstruct,” it said.
The conference heard that the biggest influencing factor in residential construction was the massive influx of migrants arriving in Western European countries such as Germany and the Netherlands, and to the Nordic countries.
It said this was likely have an impact on housing, creating more need for housing – either new construction, or renting or purchasing existing homes.
In 2015, the share of repair, renovation and maintenance has reached 60% of the total residential market.
As far as non-residential construction performance for 2016 is concerned, Euroconstruct was able to say that, without exception, all of its countries were optimistic about their non-residential market, with only two countries expecting minimal setbacks for the year after. The countries with predicted negative growth rates in new non-residential construction are Finland and Sweden.
The conference was told that civil engineering continued to grow this year, with a total growth of 3.3% estimated.
“In 2015, all Central-Eastern European countries have experienced significant growth as they tried to absorb all available EU funds from the previous programming period,” said Euroconstruct.
Poland, the seventh biggest market in 2015 in civil engineering performance, was projected to accelerate its growth, and a double-digit figure is expected each year until 2018.
“Civil engineering output will decrease by 0.6% to 2.7% in 2016, but has a promising forecast for 2017, 4.2% growth, which will be followed by a further 2.8% growth in 2018,” said Euroconstruct.
Explaining that the term “contribution” considered market size and the changes together, Euroconstruct said that what seemed particular in 2016 was that all of the six biggest markets of Europe – Germany, UK, France, Italy, Spain, Poland – were among the largest positive contributors to growth. It said this was something that had not happened for years.
“From the total 3% predicted growth for 2016, six countries are contributing by 2.3 percentage points. In other words, out of the total 3% expansion of the market – estimated to be €40 billion – 75% will be produced by these countries, which is around €30 billion,” said Euroconstruct.
The Budapest conference was organised by Buildecon.