Construction sector grows in all 19 Euroconstruct members
The European construction sector volume has experienced an estimated 3.5 % growth in 2017.
There are two key aspects in this increase.
Firstly, the growth in the construction measures in Europe has reached its highest level since 2006 that is to say shortly before the outbreak of the international financial crisis.
Secondly, construction demand rose in all 19 Euroconstruct members in 2017 which entails a general growth in Europe which had not occurred since the reunification of Germany. The good news is that it seems that this feat can be repeated in 2018.
To understand this development in construction demand, we must take into account the robust economic growth, higher than expected, that has contributed to improve family income, corporate profits and the state of public finances. This favorable environment has brought out more construction demand from both the private and public sectors.
It is important to keep in mind that the European construction industry has been on track for growth since 2014, as construction output in the four years from 2014 to 2017 has increased by a total of 9 %. And the most positive note is that the predictions say that a new increase of 6% can be expected in the 19 Euroconstruct members for 2020.
Analyzing the data offered by Euroconstruct, it is seen that the strongest stimulus once again comes from residential construction. During the past decade, residential construction was the protagonist of both the European construction boom and its subsequent decline, and now is once again the main responsible for this new moment of prosperity in the sector. After having experienced a strong advance (8.9%) in 2017, it still seems that there is room for growth in the medium term. In 2018 it will be the most expansive subsector (4.4%) but from then on it is expected to lose momentum in 2019 and 2020 given that demand is expected to weaken.
Regarding non-residential building, the forecast follows a temporal sequence similar to that of housing: the peak of growth (3.6%) is expected in 2017, and from there, it slows in 2018 until reaching its stagnation in 2020. Emphasize that the best forecasts are focused in the construction related to health, proof that there is a present (and above all, future) demand that deserves to be addressed by both private and public sector.
Finally, the report reflects that civil engineering will assume the role of market driver in the medium term with an unprecedented growth rate of more than 4% in 2018 and 2019, so that it can compensate part of the foreseeable slowdown of building activity.