News
News
Recovery of Construction Industry beginning in 2011
The Euroconstruct Group, comprising research and consulting institutes from 15 West an 4 Central European countries, forecasts that the Europe´s construction industry will overcome the global economic crisis in early 2011. However, growth rates achieved before the recession are not expectet until 2012.
In their summary of 2009, Euroconstruct experts deem 2009 as the "worst year in over a decade". A dramatic decline in demand for tall-standing structures led the European construction volume to shrink by 8,4%. The decline occurred to varius extents in individual countries; with the exception of Switzerland and Poland, however, construction activities diminished in all countries. Germany managed to get off lightly with a drop of 1,2%. In Spain (-21,5%) and Ireland (-32,2%), where construction far exceeded demand in the past boom period, the decline in the past year took on dramatic proportions.
Extreme declines affecting the sector of housing construction, which the majority of European countries sufered, is primarily responsible for the severe downswing. In 2009, housing construction in Europe plummeted by an average of 22,5%. The construction volume for new homes in Spain and Ireland alone will halve in the four years up to 2012. Many households, anticipating rapid appreciation, overextended themselves with the purchase of new properties. Seemingly endless earning prospects also attracted speculators to the scene, who then further aggravated construction demand until the bubble burst and the boom came to a sudden halt. While housing construction will continue to decline at least until 2012 in many countries, Germany is among the few countries, which could see a "slight revival" (+4%) in the coming years according to Euroconstruct.
The renovation of existing buildings, which showed itself to be exceptionally crisis-proof in the past and was also stimulated by building renovation programmes in many countries, failed to stop the downward spiral in housing construction. In 2009, it capsized with a decline of approximately 3%.
Starting in 2011, however, things are set to recover in the construction industry (+1,6%).
Despite declines in the aftermath of the economic crisis, the 19 European Euroconstruct states still represent the largest cohesive construction market with a volume of approximately 1,4 billion Euros.
