European Construction Industry Growth Continues But Slows

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European Construction Industry Growth Continues But Slows

FIEC reported 2.4% growth in activity in the EU-wide construction industry in 2015 and forecasts another increase in 2016 but at a slower pace (+2.1%).

 “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!” said FIEC Vice-President Jean-Louis Marchand.

“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 17th June,” Marchland added.

“Overall, EU total construction output amounted to €1,241 billion in 2015, which represents an increase of 2.4% compared to 2014”, reported Marchand. “This is positive, but we will still need time to catch up with the pre-crisis levels.”

Member State Disparities
According to FIEC’s statistics, developments in the EU show the following results overall:

  • Behind the overall figure for the EU as a whole, disparities between Member States remain significant with Sweden (+10%) leading and Greece (-15.1%) at the bottom.
  • The increase in activity in 2015 is mainly due to the civil engineering (+6.2%) and new housebuilding (+3.5%) sectors, whilst the non-residential sector remained weak (-0.5%) both in its private (+0.3%) and in particular in the public (-2.4%) component.
  • Refurbishment and maintenance activity maintained relatively stable before and throughout the recession (+2.6% in 2015), thereby playing an important cushioning effect for the entire construction sector. This trend is expected to continue in the near future.
  • Overall civil engineering activity in 2015 increased with a high growth rate of 6.2%, mainly boosted by significant infrastructure investments in the UK, which largely counteracts less positive developments in several other countries.
  • The level of employment in the construction industry increased slightly (+0.9% in 2015), but it should not be forgotten that over the period 2008-2014, the sector lost more than 2 million jobs.
  • Altogether, construction provides jobs for 14.1 million people, which represents 6.4% of Europe’s total employment. This rises to 42.3 million jobs when including the indirect employment generated in related sectors (‘multiplier effect’: 1 job in construction = 2 further jobs in other sectors, i.e. 3 in total).

In spite of the troubled period, the construction industry remains 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.

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