Overall, the European outputs have not hit the levels seen prior to 2008, even though there has been six years of growth.
Europe Market Review
Growth in construction output has seen a decrease to a rate of 2.3% in 2019, from its peak (by volume) of 4.1% in 2017. Growth levels are expected to decrease further and stabilise around 1% in the 2020-2022 period, according to Euroconstruct.
Overall, the European outputs have not hit the levels of output prior to 2008, even though there has been six years of growth. This can be attributed to the output of larger countries within Europe contracting to a fraction of what they were previously. However, the economic outlook remains positive, although all main construction sectors will face a decline in average annual growth.
Construction output and real GDP growth
As the most active sector, residential has experienced an ongoing upturn in housing prices and investments since 2013, which has led to significant works in residential development in these years, making it the biggest contributor to construction output. The sector reached its peak output in Europe since 2006 in 2017, and we have seen a slowdown in growth in the sector in 2018-19, with this growth expected to slow to 0.5% in 2020.
Non-residential construction is recovering at a slower pace than both the residential and civil engineering sectors. Growth was 1.8% for 2019 and it is expected to decrease to 1% in 2020. Commercial construction in Europe’s larger economies will be low.
The recovery of the civil engineering sector continued throughout 2019, with growth in the sector predicted to be 2.2% in 2020.
Overall the outlook is one of slight growth, with construction set to grow in Europe, albeit at a much slower pace than we have seen in recent years. Larger European economies are declining, bringing the average down.