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| 2005 is to be a discreet year for the construction sector in Europe The latest estimates for 2005 reported at the Euroconstruct conference in Barcelona point out that the whole construction sector in the Euroconstruct area is heading for exceeding EUR 1.2 billon of value generated. This just means an increase of +1.3%, and a fall in comparison with the growth of the sector in 2004, which was capable of generating +2.2% more value than in 2003. Only six months ago, at the Euroconstruct conference of June in Cardiff identical growth for 2005 as 2004 was envisaged, which shows how the situation of the sector has worsened in the second half of the year. The forecast for the construction sector is not the only one which has worsened: the macro-economic forecast for all the countries in the Euroconstruct group has also been revised to show a fall. Despite this, the forecast for growth in the European economy continues to be higher than that for construction. Therefore, the short-term prospects (2006-2008) still show signs of growth in the European construction sector, but in a very small margin, between 1.5% and 2%. The European construction market continues to be an amalgam of very heterogeneous national situations, and often under the generalised low averages lie particular situations which diverge from the general behaviour of the group. In view of the trends in earlier Euroconstruct reports, it is nothing new to continue to observe how the central and eastern European countries lead in the ranking of potential growth. In any case, the 2005 results have also been somewhat below what was expected in these countries: +5.4% compared to an expected +6.0%. But this has not affected expectations for coming years in the context of these countries, where the growth forecast exceeds the barrier of an annual 7%. New residential building - practically responsible for a quarter of all the value generated in the sector - seems to be leaving its years of good performance behind and to be moving towards a situation of stagnancy as of 2006. Again the contrast between Western and Eastern markets is very clear: while in Western Europe the situation is going to be even somewhat regressive, in the Eastern countries there is going to be a growth, which is going to be even stronger as of 2007. The growth in the residential sector in Sweden, Belgium, The Netherlands and Denmark is also going to be strong, although they will be short-lasting phenomena: the Swedish boom may pop in 2006, stagnancy will reach Belgium by 2007 and Denmark by 2008. Other large-sized markets like France, the United Kingdom and Spain are also leaving their moments of best performance behind them. On the other side, there is going to be a negative net balance at the end of the 2004-08 period in countries like Switzerland, Italy, Portugal, Germany and Ireland. In the chapter of new non-residential building, 2005 is turning out to be a disappointing year as the expectations of finishing the financial year with growth have not managed to materialise. Also, in the revision of Euroconstruct forecasts a scenario of growth is envisaged for 2006-2007, but somewhat lower than what had been thought six months ago. Therefore the long-awaited recovery in the European non-residential market continues to be postponed. Ireland is the country with the most brilliant prospects for its non-residential market in the 2004-08 period, as a flow of both private as well as public investment is expected in virtually all the sub-markets. Sweden is another country in Western Europe where the non-residential market is destined to grow around 10.5% in 2006 and 2007: there will be a clear recovery of the office market and positive prospects in construction related to education, health and trade. Slovakia will be the only country in the Eastern European group that will not manage to get into the list of leaders in future growth, mainly as a consequence of the falling trend in commercial construction, which has a great specific weight in this country. Portugal and Germany look like being recessive markets throughout the 2004-08 period. The civil engineering market has shown itself to have the most rapid and sustained growth in the last few years, and the forecasts indicate that it will continue in this vein, growing above the construction sector averages. Transport infrastructure (rail, but above all roads) will be the main markets responsible for this good performance. It is not new to see how the countries of central and eastern Europe are going to be the leaders in the civil engineering market in terms of growth. Apart from them, however, the forecasts are also very promising in other countries like Spain, Sweden, Ireland or Austria, whose optimism is based on ambitious government investment programmes in transport infrastructures. Spain will take maximum advantage of its last years as a net receiver of European Union funds. On the opposite side, it is necessary to highlight the recessive panorama in Portugal and Germany, where civil engineering is one of them main victims of budget cuts. write your comments about the article :: © 2005 Construction News :: home page |