Optimistic outlook for European construction
By Mike Hayes22 February 2022
A survey of European construction contractors, undertaken by industry analyst ING, has found that most believe demand will increase through 2022, generally achieving pre-Covid levels.
The positive survey response mirrors the European Union’s own Eurostat forecast of an average 2.5% growth across the EU in 2022.
This optimism comes despite ongoing issues for the industry, such as materials shortages and energy and materials price rises in most countries.
ING reported, “In August, a record percentage [18%] of EU contractors indicated lower production due to a lack of building materials or at least a delay in their delivery. This percentage shot up [29%] in January 2022, with the highest shortages in France and Germany.”
The situation in France – where pre-Covid levels of construction volume have yet to be reached – is exacerbated by the fact that the government recently brought in new regulations requiring at least 50% of the materials used in the construction of public buildings to be either timber or other bio-based materials.
ING said Germany, Austria and the Netherlands are seeing increasing demand, which is putting pressure on supply chains. This, the company said, is partly due to the ‘zero-Covid’ policies of China, which has reduced the movement of materials in ports.
Conversely, ING reported very few construction companies in Belgium, Spain and Turkey reporting materials shortages.
With growth expected in both 2022 and 2023, the company said, “Building volumes can be boosted by new investments from the EU Recovery fund. Ongoing housing shortages and high house prices provide structural demand for new residential construction.
“Furthermore, non-residential construction will see a rebound as the Covid-crisis fades, and entrepreneurs are less reluctant to invest in new company premises or renovate their existing properties.”