Construction in Western Europe identifies key trends and opportunities in the industry to 2017. Western Europe experienced a severe
financial crisis during 2008 – 2009, with economic activity in the region
contracting sharply. Reflecting ongoing weakness in the region, real GDP has
yet to rise above the pre-2008 level, with ongoing debt problems in most
countries constraining growth, particularly in Greece, Ireland, Spain and
Portugal. Budget deficits and government debt in several countries in the
region are at alarming levels owing to the sluggish recovery from the economic
crisis, which has led to record high unemployment levels. Public and private
investment for new projects has declined significantly in the recent past. The
construction industry in Western Europe recorded a CAGR of -5.94% between 2008
and 2012, mirroring the subdued economic environment in the region.
With high unemployment levels,
households have cut down sharply on discretionary spending, resulting in a
considerable fall in retail sales. To improve the situation, several governments
issued debt and implemented stimulus packages in 2009 to boost the economy.
However, amid the prolonged recovery, government debts have mounted, with the
level rising to over 70% of GDP in several countries. Despite the generally
subdued economic environment, prime retail space continues to exhibit high
occupancy rates and stable rents. Similar to retail buildings, demand for
high-quality office space is still strong in prime locations of major cities.
Office space demand usually exceeds supply, as developers have been reluctant
to invest in office space based on speculative demand. The commercial
construction market is projected to contract by 0.2% in 2013 and recover
thereafter to record a CAGR of 1.79% between 2013 to 2017.
The residential construction market
across the region is among the worst affected, and has contributed
substantially to the bleak financial situation facing countries Spain, Ireland
and Greece. Property prices rose across the region in the pre-crisis years,
leading to a construction boom in countries such as Spain and Ireland, while
activity in other countries such as the UK, Belgium, Germany and France was
more subdued. Governments across the region also invested heavily in
infrastructure development before the economic crisis.
Construction activity over 2013 and
2014 is expected to move at a very sluggish pace. Austerity measures adopted by
different countries to control the rising level of public debt are expected to
hamper growth in all construction sectors. Of the few positive factors,
inflation in the region has been fairly stable and nearer to central banks’
targets of 2%. High unemployment rates in the region have also kept labor costs
under control. Relative stability in input costs has also provided some respite
for the construction industry. It is expected that the Western European
construction industry output value US$2.0 trillion in 2017 and record a CAGR of
1.79% between now and that time.
Reasons
to buy
- Gain an overview of the market including
price dynamics, demographic profiles and key construction indicators.
- Understand the construction market in
Western Europe by reviewing the commercial, industrial, infrastructural,
institutional and residential sectors.
- Get the upper hand on your competitors by
obtaining numerous company profiles of some of the top Western European
construction companies.
- Enhance your business using Timetric’s
market data analysis for the different sectors of the Western European
construction market.
