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Europe Market Review 2019

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Following a peak growth in construction output (by volume) of 4.1% in 2017, the growth rate of output has seen a decrease in 2018, with growth levels expected to be around 2.8%.

2.8%

Construction output 2018

2%

Construction output forecast

US$14.8t

Infrastructure requirements by 2040

Europe Market Review

Following a peak growth in construction output (by volume) of 4.1% in 2017, the growth rate of output has seen a decrease in 2018, with growth levels expected to be around 2.8% according to Euroconstruct. Growth in European construction output is forecast to slow in the years leading up to 2020, with growth rates of 2.0% and 1.6% forecast for 2019 and 2020 respectively. Overall, the European economic outlook remains positive, as economies continue to improve, with GDP forecast to increase in almost all EU member states, however, growth in most is set to slow in the coming years. 

Construction output and real GDP growth

Europe GDP and construction output

Residential

The Residential sector has been more active than any sector since the return to economic growth, following the recession in 2008. There has been an ongoing upturn in housing prices and investments in Residential developments since 2013, which have led to significant works in Residential construction in these years, making it the biggest contributor to construction output. The sector in Europe reached its peak output since 2006 in 2017, and we have seen a slowdown in growth in the sector in 2018.

Non-residential

Non-residential construction is recovering at a slower pace than both the Residential and Civil Engineering sectors. Growth is predicted to be between 1.5% and 1.8% for 2018 and 2019. Office construction will perform well above these averages, in line with demand for commercial space. Industrial construction in large economies, such as Germany and the United Kingdom, is expected to decline, and this is unlikely to be offset by improvements in the markets of the Netherlands, Belgium and Denmark.

Civil Engineering

The recovery of the Civil Engineering sector has continued throughout 2018. Growth in the sector is set to speed up in the next number of years, with many large scale infrastructure projects planned throughout Europe to meet their infrastructure requirements of US$14.8 trillion up to 2040. Improvements in output in the civil engineering sector can be linked with the improving economies within Europe, leading to increased infrastructure funding from national bodies and the European commission for these important infrastructure projects.

Overall the outlook remains positive, with construction set to grow in Europe, albeit at a slower pace than we have seen in recent years.

Index of production in the European construction sector 2007–2018

Europe index of production in the European construction sector Sept 18

Construction cost - new residential buildings index*

Residential building index

EU labour costs in construction 2019*

Hourly labour costs in construction

EU inflation 2018

EU inflation

Forecast Europe GDP annual % change 2019–2020

Europe GDP forecast 2018 2019

Top 15 European contractors*

Top EU contractors

Top 15 European design firms*

Top EU design firms

EU procurement timescales 2019

EU procurement

EU procurement thresholds 2019

EU procurement threshold 2019

Currency movements - Euro vs various European currencies*

Europe Currency Exchange

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