Beyond all market influences seen in recent years, the effects of the corona crisis have now taken over within a short time.
According to the latest forecast, the construction volume in the EUROCONSTRUCT area is expected to slump by 7.8% in 2020.
This means the second upward revision after -11.5% in June and -9.1% in August. For 2021, the forecast is quite similar to
the revision in August and amounts to a growth of 4.1%. For the years 2022 (+3.4%) and 2023 (+2.4%) the outlook remains positive.
Until 2023 total construction output in the EUROCONSTRUCT area is likely to reach € 1.73 trillion and to exceed the pre-corona
level of 2019 by € 28 billion or 1.7%.
The consequences for the individual countries are significantly different. Thus, the range goes from a small growth in Finland
and stagnation in Portugal and Norway to a sharp decline of almost one fifth in the UK in the current year. Other heavyweights
like France or Spain are also strongly affected, whereas the German market did surprisingly well due to the fact that activities
could continue relatively unhindered.
Regarding the individual market segments, it should be pointed out that the civil engineering sector is likely to be least
affected by the corona turbulences. The expenditure on infrastructure facilities will fall by only 3.8% this year and expand
by 5.2% next year. However, the negative consequences for building construction should be much bigger. The EUROCONSTRUCT network
is expecting a minus of 9.2% for the non-residential construction sector followed by a moderate plus of 2.5% in 2021. Even
in 2023, the level of
2019 is likely to be missed. This is different for the residential segment. After a major loss by 8.6% in 2020, the market
will regain significant momentum in 2021 with an expected growth of 4.7%. Due to government bans and legal uncertainties in
spring also many renovation projects had to stop, partly even for weeks.
This leads to the fact that, different from typical economic crises, this time even the renovation sector has been heavily
affected. While the construction of new buildings will probably collapse by 10.5% this year, the renovation activities will
severely weaken by 7.3%, as well.
The assessment of the further development of construction activity is based on the assumption that the economy in the EUROCONSTRUCT
area will shrink by 8.0% in 2020 and grow by 4.9% in 2021. But in times of strong restrictions of public life and with another
lockdown in many countries, whose duration and consequences are currently difficult to assess, this can only be an orientation.
In fact, the direct impact on the construction industry should be much less severe than in spring. The situation for construction
companies, clients and authorities is no longer entirely new and most construction sites should remain open now because, compared
to the period March-May, there are already many protection measures in use and the digital working procedures are practised.
But indirect negative effects of the pandemic must be considered, as well. Already the first lockdown caused economic damages
like rising unemployment, sunken turnovers or tax losses which will be felt in the coming months. While these are not yet
fully foreseeable, the European economy is now threatened by a second blow, although partly this may be less severe. Much
will also depend on how well the government relief/stimulus programmes will work.
Beyond the corona issue it is to be expected that in the mid-term positive factors like the need for housing in urban regions,
for energetic renovation and for modernising the infrastructure will set the tone again.