Europe Construction Output Declined 1.1% in September

Europe Construction Output Declined 1.1% in September
Published: 19 November 2009

European construction output fell in September as declines in Germany and Portugal offset rebounds in Spain and France.

Bloomberg reported that construction in the 16-nation euro region fell 1.1 percent from August, when it rose a revised 0.1 percent, the European Union’s statistics office in Luxembourg said in a statement today. From a year earlier, output dropped 8 percent.

Europe’s construction industry is struggling to recover after a worldwide credit crunch sparked a global recession and made banks more reluctant to finance housing and infrastructure projects. Germany’s HeidelbergCement AG said on Nov. 4 that it is “very optimistic” for 2010 after cutting almost 9,000 jobs to bolster earnings.

“The recession may be over but the crisis certainly isn’t,” said Alexander Krueger, head of capital-market analysis at Bankhaus Lampe KG in Dusseldorf, Germany. “The economic development is stable but remains on an extremely low level.”

In Germany, Europe’s biggest economy, construction fell 1.8 percent in September from the previous month, while Portugal showed a 2.3 percent drop, according to today’s report. French output rose 0.1 percent and Spanish construction increased 1.5 percent, the first gain in five months. As part of one of the largest stimulus programs in Europe, Spain is spending 8 billion euros ($12 billion) on public infrastructure projects.