Euroconstruct: slower construction recovery expected
The recovery in European construction output is expected to be slower than had previously forecast, Euroconstruct said on Friday.
The market research firm said a recovery was under way but cautioned that it expected construction output in the 19 European countries it monitors to fall by 0.4 per cent in 2011 compared to the 0.1 per cent drop it had forecast in December. This follows a provisional 3.7 per cent slump in 2010.
For 2012, Euroconstruct said it forecast a 1.3 per cent rise in construction output, compared to the two per cent increase it saw in December, as strong markets such as Poland, where construction is seen growing 12.8 per cent in 2011, are seen growing less next year than originally expected.
"A tightening of financial policy threatens to delay public investments and construction, especially in Eastern Europe and generally in the infrastructure construction sector," Euroconstruct said in a statement. Growth is expected to pick up in 2013, with construction output rising to 2.3 per cent, Euroconstruct said. In its December forecast it expected growth of 2.5 per cent.
Spain and Germany have not been equally successful in weathering a slump in activity, with the Mediterranean country expected to show a drop in output of 15 per cent in 2011, suffering by a housing oversupply, as Germany grows by 1.7 per cent, Euroconstruct said.
France is expected to show 2011 construction growth of 2.7 per cent as opposed to 1.5 per cent forecast previously, Euroconstruct added.
Ireland will see its construction output also shrink by 15 per cent in 2011, Euroconstruct said. Portugal’s construction is expected to decrease by 6.3 per cent in 2011 as it cuts spending due to its EUR78bn EU/IMF bailout. Greece is not monitored by Euroconstruct.
Civil engineering is seen contracting more in 2011 than previously thought – 3.1 per cent instead of 2.1 per cent while residential construction activity is set to pick up in 2011 with growth of 3.4 per cent. Non-residential construction is now seen shrinking by 2.5 per cent, as schools, hospitals and other types of social infrastructure suffer from austerity cuts, Euroconstruct said.
Building renovation, which is the largest segment within European construction, accounting for 41 percent of output, is expected to grow by 0.6 percent in 2011, driven by energy efficiency initiatives and regulations, Euroconstruct added.
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