STATE OF PLAY - FORECASTS
FOR EUROPEAN CONSTRUCTION
Michael Weingärtler
michael.weingaertler@euroconstruct.org
European Builders Confederation
Annual Meeting 2014
20 June 2014 - Palermo, Italy
OVERVIEW
 Macro-economic Framework
 Overall Trends in Construction
 Construction Outlook by Sectors
 Housing
 Non-residential construction
 Civil Engineering
EUROCONSTRUCT NETWORK
FI
EUROPE (EC-19)
Austria, Belgium, Denmark, Finland,
France, Germany, Ireland, Italy,
Nether-lands, Norway, Portugal, Spain,
Sweden, Switzerland, United Kingdom,
Czech & Slovak Republic, Hungary,
Poland.
NO
SE
DK
IR
BIG 5 Countries
France, Germany, Italy, Spain,
United Kingdom
UK
NL
BE
Northern Europe
Norway, Sweden, Finland,
Denmark, Ireland
FR
PL
DE
CZ
AT
CH
Smaller European Countries
Austria, Belgium, Netherlands,
Portugal, Switzerland
Eastern Europe
Czech Republic, Hungary,
Slovak Republic, Poland
IT
PT
ES
SK
HU
DOUBLE DIP IN CONSTRUCTION
10
GDP EC-19
Total Construction EC-19
5
0
-5
-5,5
-9,0
-10
'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13
Source: EUROCONSTRUCT (Oslo 6/2014).
WHAT HAPPENED?
(1)
INCREASING
WORLD TRADE
(2)
DYNAMIC
EXPORTS
(3)
MACHINERY
INVESTMENTS
(4)
CONSTRUCTION
INVESTMENTS
EUROPEAN
PUBLIC
DEBT
CRISIS
THREE STEPS OF ECONOMIC RECOVERY
 World Trade

Exports
Time lag
 Investments


Consumption
2-4 quarters
Construction
2-4 quarters
2008
2009
2010
GDP
0.3
– 4.1
2.2
1.8
– 0.2
0.2
1.7
Exports
1.4
– 11.2
10.5
6.2
2.5
1.3
4.1
– 0.9 – 12.0
0.6
2.1
– 2.3
– 1.7
3.1
Fixed Capital Investment
2011
2012
2013
2014
Private Consumption
0.2
–1.2
1.4
0.5
– 0.4
0.2
1.4
Public Consumption
2.3
2.3
0.9
0.0
0.0
0.6
0.7
– 3.9
– 9.0
– 3.4
0.2
– 5.5
– 2.7
1.3
Construction
Source: EUROCONSTRUCT (OSLO 6/2014).
HOW WILL IT GO ON?
4
GDP EC-19
Total Construction EC-19
2
0
-5,5
-9,0
-2
-4
'13
Source: EUROCONSTRUCT (Oslo 6/2014).
'14
'15
'16
EUROPEAN CONSTRUCTION 2014
Volume: construction output per capita in mill. Euro (horizontal axis)
Activity: real annual average growth 2014 in % (vertical axis)
increasing
activity
12
increasing
activity
IR
10
8
4
SF
UK
HU PL
DE
AT
SK
2
0
IT
PT
-2
FR
CZ
-4
BE
NL
DK
average growth
6
average growth
decreasing
activity
high volume
average volume
CH
FI
NO
ES
-6
0
low volume
2
4
Source: EUROCONSTRUCT (Oslo 6/2014).
6
8
10
high volume
decreasing
activity
low volume
RENOVATION DOMINATES WESTERN
CIVIL ENGINEERING & NON-RESIDENTIAL EASTERN EUROPE
European Construction – A 1.30 bn Euro Market (2013)
EC-15
TOTAL CIVIL
ENGINEERING
EC-4
NEW HOUSING
218 bill. €
TOTAL CIVIL
ENGINEERING
NEW HOUSING
22 bill. €
11 Mrd. €
263 bill. €
21%
18%
16%
32%
16%
NEW NONRESIDENTIAL
30%
196 bill. €
45%
BUILDING RENOVATION
550 bill. €
22%
BUILDING
RENOVATION
15 bill. €
Source: EUROCONSTRUCT (Oslo 6/2014). – Western Europe: Belgium, Denmark, Germany, Finland, France, Ireland, Italy, Great Britain,
Netherlands, Norway, Austria, Portugal, Sweden, Switzerland, Spain. Eastern Europe: Czech Republic, Hungary, Poland, Slovak Republic.
NEW NONRESIDENTIAL
21 bill. €
SLOW RECOVERY IN CONSTRUCTION
gdp and construction output
index 2010 = 100
Eastern Europe EC-4
Western Europe EC-15
120
110
120
107
GDP
100
90
115
GDP
110
100
Total Construction
97
80
90
104
without
Poland
86
80
'10 '11 '12 '13 '14 '15 '16
Total Construction
'10 '11 '12 '13 '14 '15 '16
Source: EUROCONSTRUCT (Oslo 6/2014. – Western Europe: Belgium, Denmark, Germany, Finland, France, Ireland, Italy, Great Britain,
Netherlands, Norway, Austria, Portugal, Sweden, Switzerland, Spain. Eastern Europe: Czech Republic, Hungary, Poland, Slovak Republic.
SLOW RECOVERY IN CONSTRUCTION
gdp and construction output
index 2010 = 100
Smaller Countries
Northern Europe
120
110
100
111
GDP
120
106
110
GDP
110
Total Construction
100
90
90
80
80
'10 '11 '12 '13 '14 '15 '16
102
Total Construction
'10 '11 '12 '13 '14 '15 '16
Source: EUROCONSTRUCT (Oslo, 2014). – Northern Europe: Denmark, Finland, Ireland, Norway, Sweden. Smaller Countries: Belgium, Netherlands, Austria, Portugal, Switzerland.
RECOVERY OF NEW HOUSING IN EUROPE
housing output
index 2013 = 100
115
NEW HOUSING
110
TOTAL
105
100
HOUSING RENOVATION
95
00 01 02 03 04 05 06 07 08 09 10 11 12 13
90
13
Source: EUROCONSTRUCT (Oslo 6/2014) .
14
15
16
LONG TERM HOUSING IN EC-19
total housing output
in billion Euro at 2013 prices
800
750
– 25%
700
650
600
+ 6%
550
500
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16
Source: EUROCONSTRUCT (Oslo 6/2014).
BACK TO 2010
800
total housing output
in billion Euro at 2013 prices
750
700
650
600
550
500
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16
Source: EUROCONSTRUCT (Oslo 6/2014).
TOTAL HOUSING IN BIG-5 COUNTRIES
volume change in billion Euro
10-13
15
13-16
10
5
bn Euro
0
-5
-10
-15
-20
-25
-30
France
Source: EUROCONSTRUCT (Oslo 6/2014) .
Germany
Italy
Spain
United
Kingdom
HOUSING TRENDS – NORTHERN EUROPE
80
total housing output
in billion Euro at 2013 prices
– 28%
70
60
50
+ 16%
40
30
20
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16
Source: EUROCONSTRUCT (Oslo 6/2014). – Northern Europe: Denmark, Finland, Ireland, Norway, Sweden.
TOTAL HOUSING IN NORTHERN EUROPEAN COUNTRIES
Volume change in billion Euro
10-13
13-16
4
3
3
2
bn Euro
2
1
1
0
-1
-1
-2
-2
Denmark
Source: EUROCONSTRUCT (Oslo 6/2014).
Finland
Norway
Sweden
Ireland
HOUSING TRENDS - Smaller Countries
110
total housing output
in billion Euro at 2012 prices
– 11%
100
90
80
+ 4%
70
60
50
40
30
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16
Source: EUROCONSTRUCT (Oslo 6/2014). – Northern Europe: Denmark, Finland, Ireland, Norway, Sweden. Smaller Countries: Belgium, Netherlands, Austria, Portugal, Switzerland.
TOTAL HOUSING - SMALLER COUNTRIES
volume change in billion Euro
10-13
13-16
4
3
bn Euro
2
1
0
-1
-2
-3
-4
Austria
Source: EUROCONSTRUCT (Oslo 6/2014).
Belgium
Netherlands
Portugal
Switzerland
HOUSING TRENDS – EASTERN EUROPE
25
total housing output
in billion Euro at 2012 prices
– 24%
20
15
+ 9%
10
5
0
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16
Source: EUROCONSTRUCT (6/2014). – Eastern Europe: Czech Republic, Hungary, Poland, Slovak Republic.
TOTAL HOUSING – EASTERN EUROPE
volume change in billion Euro
10-13
13-16
2
bn Euro
1
0
-1
-2
Czech Republic
Source: EUROCONSTRUCT (Oslo 6/2014).
Hungary
Poland
Slovak Republic
SIGNIFICANT GROWTH DIFFERENCES
average housing permits per 1000 inhabitants 2013-2016
3.5 permits per 1,000 inhabitants
2 & less
2<3
3<4
4<5
5 & more
• Portugal
• Spain
• Hungary
•
•
•
•
•
•
• Sweden
• Czech
Republic
• Belgium
• Finland
• Poland
•
•
•
•
•
Netherlands
Germany
Slovakia
Denmark
UK, Italy
Ireland
Source: EUROCONSTRUCT (Oslo 6/2014).
Austria
Norway
France
Finland
Switzerland
RENOVATION DOMINATES HOUSING OUTPUT
IN WESTERN EUROPE
share of new construction and renovation in european housing markets in 2013
in %
100%
90%
15
24
27
28
80%
New
Housing
38
70%
66
60%
50%
40%
85
76
73
72
30%
62
20%
34
10%
0%
Denmark
Ireland
Source: EUROCONSTRUCT (Oslo 6/2014).
Italy
Germany
EC-15
EC-4
Housing
Renovation
PUBLIC RENOVATION MEASURES AS REACTION TO
THE LONG TERM ENERGY PRICE TREND
EU Public Debt Crisis
2003 vs 2012
+430%
World Financial Crisis
Crude oil price trend 1960 – 2013
2009/10
+30%
2004/05
+45%
‘Oil-Crisis‘
S: TECSON (www.tecson.de)
TOTAL HOUSING PRODUCTION
FI
average growth
2013-2016: 2.0%
NO
SE
Western Europe: 2.0%
Eastern Europe: 2.8%
DK
IR
UK
4% and above
NL
BE
PL
DE
CZ
2% to less than 4%
1% to less than 2%
FR
AT
CH
below 1%
shrinking market
Source: EUROCONSTRUCT (Oslo 6/2014) .
IT
PT
ES
SK
HU
MINOR RECOVERY IN EUROPEAN
NON-RESIDENTIAL CONSTRUCTION
non-residential construction output
index 2013 = 100
110
105
100
Renovation
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16
95
Total
New
90
13
Source: EUROCONSTRUCT (Oslo 6/2014).
14
15
16
BEST OUTLOOK:
NEW INDUSTRIAL CONSTRUCTION
new non-residential construction output
index 2013 = 100
120,0
Industry
110,0
Office
Total
Commercial
Public
100,0
90,0
2010
2011
Source: EUROCONSTRUCT (Oslo 6/2014).
2012
2013
2014
2015
2016
POOR NON-RESIDENTIAL PERFORMANCE
gdp & non-residential construction Output
index 2010 = 100
Western Europe EC-15
Eastern Europe EC-4
120
110
120
107
GDP
100
115
GDP
110
106
Non-Residential
100
96
90
90
Non-Residential
80
Poland,
excluded
94
80
'10 '11 '12 '13 '14 '15 '16
'10 '11 '12 '13 '14 '15 '16
Source: EUROCONSTRUCT (Oslo 6/2014). – Western Europe: Belgium, Denmark, Germany, Finland, France, Ireland, Italy, Great Britain,
Netherlands, Norway, Austria, Portugal, Sweden, Switzerland, Spain. Eastern Europe: Czech Republic, Hungary, Poland, Slovak Republic.
BIG-5 EUROPEAN COUNTRIES
MINOR GROWTH IN NON-RES. CONSTRUCTION
new non-residential construction output
index 2013=100
France
22%
United
Kingdom
25%
Spain
9%
120
Germany
27%
Italy
17%
115
BIG-5
110
United Kingdom
Germany
Italy
105
100
France
Spain
95
90
13
Source: EUROCONSTRUCT (Oslo 6/2014) .
14
15
16
NORTHERN COUNTRIES
average growth 2013-2016: +2.6%
Sweden
17%
Finland
23%
new non-residential
construction output
index 2013=100
Ireland
9%
Norway
36%
140
Denmark
15%
Denmark
130
120
Finland
110
Ireland
Norway
Sweden
100
90
13
Source: EUROCONSTRUCT (Oslo 6/2014) .
14
15
16
SMALLER WESTERN EUROPEAN COUNTRIES
average growth 2013-2016: +1.0%
new non-residential
construction output
index 2013=100
Netherlands
25%
Switzerland
21%
Portugal
8%
Belgium
25%
120
Austria
21%
110
Netherlands
Portugal
100
Austria
Switzerland,
Belgium
90
13
Source: EUROCONSTRUCT (Oslo 6/2014).
14
15
16
CENTRAL EASTERN EUROPEAN COUNTRIES
average growth 2013-2016: +2.5%
new non-residential
construction output
index 2013=100
Poland
61%
Slovak
Republic
7%
120
Hungary
8%
Czech
24%
Poland
110
Hungary
Czech Republic
100
Slovak Republic
90
13
Source: EUROCONSTRUCT (Oslo 6/2014).
14
15
16
NON-RESIDENTIAL OUTLOOK
FI
NO
average growth
2013-2016: 1.2%
SE
Western Europe: 1.1%
Eastern Europe: 2.6%
DK
IR
UK
3% and above
NL
BE
PL
DE
CZ
1.2% to less than 3%
FR
0.6% to less than 1.2%
below 0.6%
shrinking market
Source: EUROCONSTRUCT (Oslo 6/2014).
AT
CH
IT
PT
ES
SK
HU
CIVIL ENGINEERING OUTLOOK
gdp and civil engineering output
index 2010 = 100
Eastern Europe EC-4
Western Europe EC-15
120
120
110
107
GDP
110
90
90
80
GDP
100
100
Civil Engineering
115
90
'10 '11 '12 '13 '14 '15 '16
80
106
Poland,
excluded
Civil Engineering
85
70
'10 '11 '12 '13 '14 '15 '16
Source: EUROCONSTRUCT (Oslo 6/2014). – Western Europe: Belgium, Denmark, Germany, Finland, France, Ireland, Italy, Great Britain,
Netherlands, Norway, Austria, Portugal, Sweden, Switzerland, Spain. Eastern Europe: Czech Republic, Hungary, Poland, Slovak Republic.
CIVIL ENGINEERING OUTLOOK
gdp and civil engineering output
index 2010 = 100
Smaller Countries
Northern Countries
120
110
120
111
GDP
111
100
Civil Engineering
110
106
100
90
90
80
80
70
'10 '11 '12 '13 '14 '15 '16
GDP
Civil Engineering
98
'10 '11 '12 '13 '14 '15 '16
Source: EUROCONSTRUCT (Oslo 6/2014). – Northern Europe: Denmark, Finland, Ireland, Norway, Sweden. Smaller Countries: Belgium, Netherlands, Austria, Portugal, Switzerland.
ROAD SECTOR DOMINATES CE
STRUCTURE IN CIVIL ENGINEERING
PRODUCTION OUTPUT 2013
EC-19
EC-4
TELECOM &
OTHER CE
43 bn. €
WATER
31 bn. €
32%
12%
ENERGY
40 bn. €
ROADS
84 bn. €
16%
16%
8%
TELECOM &
OTHER CE
16%
OTHER
TRAFFIC
20 bn. €
Source: EUROCONSTRUCT (Oslo, 6/2013).
2 bn. €
WATER
4 bn. €
40
18
15
ENERGY
3 bn. €
RAILWAY
42 bn. €
ROADS
9 bn. €
11
5 11
OTHER
TRAFFIC
1 bn. €
RAILWAY
3 bn. €
ENERGY SECTOR AS GROWTH DRIVER
total civil engineering output
index 2010 = 100
130,0
120,0
Energy
Rail
110,0
Total
Water
Road
100,0
Telecom
90,0
2010
Source: EUROCONSTRUCT (Oslo 6/2014).
2011
2012
2013
2014
2015
2016
CIVIL ENGINEERING OUTLOOK IN BIG-5
EUROPEAN COUNTRIES
total civil engineering output
index 2013 = 100
120
United Kingdom
115
110
Germany
105
BIG-5
100
France
95
Spain
90
85
Italy
80
2013
Source: EUROCONSTRUCT (Oslo 6/2014).
2014
2015
2016
CIVIL ENGINEERING OUTLOOK
FI
NO
average growth
2013-2016: 1.5%
SE
Western Europe: 1.3%
Eastern Europe: 4.5%
DK
IR
UK
4.2% and above
NL
BE
CZ
2% to less than 4.2%
FR
0.5% to less than 2%
below 0.5%
shrinking market
Source: EUROCONSTRUCT (Oslo 6/2014).
AT
CH
IT
PT
ES
PL
DE
SK
HU
SUMMARY
Economic recovery is mainly driving
 European Housing
 Civil Engineering
HIGHEST RISK
SLOW AND UNSTABLE OVERALL
ECONOMIC DEVELOPMENT