EAB Q4 2018 - USP Marketing Consultancy€¦ · Rolling Order book Barometer (based on Q4 2008) • With a hard Brexit becoming a more realistic scenario every day, sentiment in the

European Architectural Barometer – Q4 2018product ofTheme: Circular and sustainable construction

February 2019

2

Preface Forecast overview Economic and construction figures per country

Theme part:

Circular and sustainable construction

Research background Appendix

Table of contents

3


Theme part:



Table of contents

Preface

4

The added value

of the European

Architectural

Barometer

Theme part:

Circular

construction

Preface Q4 2018 report

Theme part: Circular construction

The added value of the European

Architectural Barometer

• For decision makers charged with considering company

resources, staffing, and marketing strategy, a clear insight into

future construction volumes is essential. Economic indicators,

however, seldom provide an adequate picture of these volumes.

Arch-Vision therefore combines economic indicators with

architects’ expectations in order to give insight in construction

volumes. In addition, a current theme is investigated every

quarter to determine trends and developments within the

construction sector. That is why this report is a must-have for

each construction marketeer.

• Every quarter we ask our clients for input about the specific

topics we cover. This quarter Arch-Vision would like to thank the

following clients who actively participated in the discussion,

provided feedback about the topic covered in this survey, and

contributed suggestions for the questionnaire and the report:

• BASF

• Isobouw

• Xella

• This report is the Q4 2018 edition of the European Architectural

Barometer in which architects provide a strong indication of the

developments in the construction sector. Next to the economic

developments and the forecasts for the next few years, this report

also gives you insights in the topic ‘circular construction’.

• The stable image of all European countries has somewhat

disappeared, as several indicators and also architects report a

slightly more volatile situation than in recent quarters. Especially

the British construction sector is very insecure due to Brexit

negotiations and architects are very concerned about a possible

hard Brexit and the influence this will have on the industry.

Although fast growing markets such as the Netherlands and Spain

keep reporting very positive figures, the growth figures that were

expected in the past year might not be met due to a lack of labour

and limitations of the production capacity.

• In this quarter, architects were asked about sustainable and

circular construction. To what extent do architects already see

that sustainability and circularity are taken into account in their

projects, and what is circularity according to them.

• Furthermore, it is interesting to see what architects think will

happen in future years. Do they expect the construction

economy to become fully circular, and if so, when will this

happen?

5


Theme part:



Table of contents

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

XX% -XX% XX% XX% XX% XX% 1,3% XX% -XX% -XX%

€ XX € XX € XX € XX € XX € XX € 164 € XX € XX € XX

€ XX € XX € XX € XX € 97,2 € XX € XX € XX

€ XX € XX € XX € XX € 67,2 € XX € XX € XX

Forecast overview

6

Future building volumes in total, new-build and renovation

Barometer forecastsbuilding construction

Building volumes in billion euros

Building volumes in euros in the new-build segment

Building volumes in euros in the renovation segment

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Forecast overview

7

Future building volumes in total, new-build and renovation

Barometer forecastsbuilding construction

Building volumes in billion euros

Building volumes in euros in the new-build segment

Building volumes in euros in the renovation segment

8


Theme part:



Table of contents

Results per country – United Kingdom

X

X

0%

10%

20%

30%

40%

50%

60%

Q1

'09

Q1

'10

Q1

'11

Q1

'12

Q1

'13

Q1

'14

Q1

'15

Q1

'16

Q1

'17

Q1

'18

EU UK

10

Development of order book Expecting empty order book in 12 months

Increase of more than 5% Increase of 0-5% Remains the same (0%)

Decrease of 0-5% Decrease of more than 5%

Based on previous year

Rolling Order book Barometer (based on Q4 2008)

• With a hard Brexit becoming a more realistic scenario every day, sentiment in the British construction industry is quite negative. The number of architects

expecting an empty order book in the next twelve months, is the highest in two years.

• The order book developments remain positive, which is mainly driven by the housing segment. When a hard Brexit will take place, architects expect a strong

decrease of the construction industry. These first signs are already visible, especially in the commercial sector where investors are reluctant to finance new

projects.

Economic and construction figures

-550

-450

-350

-250

-150

-50

50

150

250

350

450

550

650

-100%

-80%

-60%

-40%

-20%

0%

20%

40%

60%

80%

100%

Q1

'09

Q1

'10

Q1

'11

Q1

'12

Q1

'13

Q1

'14

Q1

'15

Q1

'16

Q1

'17

Q1

'18

Development building permits

Building volumes

Economic and construction related indicatorsValue

Q4 2017

Value

Q3 2018

Value

Q4 2018Q-2-Q development

GDP (quarterly growth rate) (%)* 0.4 (Q3-Q2)

Consumer confidence indicator** -5.4

Industrial confidence indicator** 11.0

Construction confidence indicator** 4.4

Production value buildings (index 2015=100)** 113.8 (Q3-Q2)

Architects with postponed projects (%)*** 31

Architects with cancelled projects (%)*** 13

Building permits residential (index 2015=100)** 109.0

Building permits non-residential (index 2015=100)** 93.9

11

• It is hard to predict what will happen with the British construction industry in the coming

years. But all in all, the sentiment is becoming more negative every quarter and

according to architects a hard Brexit will have a very strong negative impact.

• The thriving housing segment is currently what keeps the industry going, but for the

next two years based on the expectations of architects and their current development a

slightly negative scenario is forecasted (-X%, -X% for 2019 and 2020).

X% X% X% X% X% X% -X% -X%

Barometer forecasts building construction

Source: *Country statistical office; ** Eurostat, *** Arch-Vision


Building permits - Residential

Building permits - Non-residential

Index 2015=100

Source: Eurostat

X

X

0

25

50

75

100

125

150

175

200

Q1

'09

Q1

'10

Q1

'11

Q1

'12

Q1

'13

Q1

'14

Q1

'15

Q1

'16

Q1

'17

Q1

'18

€0

€50

€100

€150

201

3

201

4

201

5

201

6

201

7

201

8

201

9

202

0

Building volumes new-build Building volumes renovation


12

The economic and construction figures are also available for:

• Germany

• France

• Spain

• Italy

• The Netherlands

• Belgium

• Poland

13


Theme part:



Table of contents

14

Europe Sustainability• XX% of the architects say that the principal (or project owner) asks

for sustainability in projects. XX of them indicate that the principal

is also willing to invest in sustainability.

• Architects consider XX as the most important stakeholders in

making the existing building stock more sustainable.

Circularity• According to European architects, XX and XX are considered the

most important characteristics of a circular construction economy.

• Circularity is taken into account in XX% of the projects. The larger

part of these projects are non-residential projects.

• A full circular construction economy is expected in XX by a third of

the European architects. Architects who already consider

circularity in the majority of their projects, expect this to happen

sooner than their colleagues who consider circularity in the

minority of their projects.

• In order for circularity to succeed, a change of mindset within the

construction industry is needed according to XX% of the European

architects. The XX is seen as the most important party to drive the

sector towards a circular construction economy, but is not giving a

good example by asking for this in projects yet.

Sustainability and circularity in Europe

Circularity in Europe

advise on sustainable building methods

specify more sustainable materials

design buildings that are easy to transform/ dismantle

XX%Circularity is taken into account in of the architectural projects

of these projects are residential projects

Demand & investment by principals

XX XX% XX%

XX XX% XX%

XX XX% XX%

Limiting waste XX% XX%

Optimization of resources used and

environmental impact LCAXX% XX%

What is circular construction economy for the architect?Top-5 characteristics

XX

XX

XX

National government

Project owner/ principal of the

project

Who is already asking for circularity?Top-5 most important clients

Considers circularity in minority of projects

XX%

% of European architects who …[(Strongly) agree]

Considers circularity in majority of projects

Circularity is asked for by principal

and they are willing to invest in it

It’s asked for, but

not willing to investIt’s not asked for Don’t know

Circularity in Europe

16

More at European level:

• Demand for & invest in sustainability by principals

• Top-5: Most important characteristics of sustainability

• Top-5: Most important stakeholders in making existing building stock more sustainable

• By when to expect a fully circular construction economy

• Top-5 most important parties who will drive the sector towards a circular construction economy

• Statements:

• Circularity will only succeed if construction industry changes its mindset

• Resource passports are necessary to capture information about products used

• Circularity will only succeed if enforced by the government

• Circularity is mainly used as a selling argument

• Circularity means that manufacturers will stay the owner of materials

17

Cross-country comparison

Sustainability• The majority of architects in XX and XX say that principals ask for and

are willing to invest in sustainability. In XX the demand for sustainability

is lowest; there the majority of architects say that the principal does not

ask for sustainability at all.

Circularity• In all countries, the majority of architects experience that principals do

not ask for circularity yet. The demand for circularity is highest in XX,

where XX% of the architects get requests on circularity from principals.

• The share of projects in which circularity is taken into account is highest

in XX (XY%) and XX (XY%), and lowest in XX (XY%) and XX (XY%).

For all countries, except for XX and XX, the majority of these projects

are non-residential projects.

• The high share of projects in XX and XX can be explained by an active

government on this topic, as well as the understanding of the concept. In

these countries it is mostly about limiting waste. One of the base

principles of circularity.

• Most architects in the respective countries advise on sustainable building

methods or specify more sustainable materials, but only in XX, XX and

XX about half of the architects also design buildings that are easy to

transform or dismantle. This shows that most countries are in the early

stages of a circular construction economy.

• Architects in XX are most pessimistic about the realisation of a fully

circular economy, as XX% does not expect this to happen at all.

Sustainability and circularity cross-country comparison

Circularity cross-country comparison

18

United Kingdom

XX% (XX/XY) NetherlandsXX% (XX/XY)

PolandXX% (XX/XY)

ItalyXX% (XX/XY)

SpainXX% (XX/XY)

GermanyXX% (XX/XY)

FranceXX% (XX/XY)

BelgiumXX% (XX/XY)

Share of projects in which circularity is taken into account(shares of residential / non-residential)

2030 XX% XX% XX% XX% XX% XX% 27% XX%

2040 XX% XX% XX% XX% XX% XX% 17% XX%

2050 XX% XX% XX% XX% XX% XX% 19% XX%

Later than 2050 XX% XX% XX% XX% XX% XX% 21% XX%

This will not happen XX% XX% XX% XX% XX% XX% 16% XX%

Don’t know XX% XX% XX% XX% XX% XX% 0% XX%

By when to expect a fully circular construction economy?

Involvement of architects in circular construction economy

I advise on sustainable building methods

XX% XX% 89% XX% XX% XX% XX% XX%

I specify more sustainable materials


I design buildings that are easy to transform or dismantle


% (strongly) agree

Circularity cross-country comparison

19

More at cross-country level:




• Demand for & invest in circularity by principals

• Top-5: Most important characteristics of a circular construction economy

• Top-5: Most important clients already asking for circularity

20

THE UNITED KINGDOM Sustainability• Sustainability is asked for by the majority of all principals. XX of the

British architects who indicate that sustainability is requested in

projects, say that the principal is willing to invest in sustainability.

• XX and XX are the driving forces in making the building stock more

sustainable.

Circularity• Circularity is not asked for by most principals. It is taken into

account in XX projects. The majority of these projects are non-

residential projects.

• The biggest obstacle is XX that is required in order for circularity to

be taken into account in projects. Next to that, British architects

require more information from manufacturers about circularity,

products and the performance of materials in order for them to

move towards a more circular construction economy.

• Larger British architectural firms are more positive about the

realisation of a fully circular economy. A third of the larger firms

expect a fully circular economy to happen in XX, compared to a XX

of the smaller firms. A XX of the smaller firms do not even expect a

fully circular economy to happen at all.

Sustainability and circularity in the United Kingdom

2030 XX% XX%

2040 XX% XX%

2050 XX% XX%

Later than 2050 XX% XX%

This will not happen XX% XX%

Don’t know XX% XX%

Circularity in the United Kingdom

21

STRONGLY AGREE AGREE NEUTRAL DISAGREE STRONGLY DISAGREE DON’T KNOW

Circularity will only succeed if construction industry changes its mindset

Resource passports are necessary to capture information about products used

Circularity will only succeed if enforced by the government

Circularity is mainly used as a selling argument

Circularity means that manufacturers will stay the owner of materials

XX

XX

XX

Building owners (private)

Building owners (commercial)

Who will drive the sector towards a circular construction economy?Top-5 most important parties

Statements

By when to expect a fully circular construction economy?

2-4 FTE 5+ FTE

41%

46%

15%

6%

42%

34%

46%

19%

13%

11%

12%

25%

39%

38%

3%

6%

4%

17%

30%

5%

18%

7%

5%

4%

6%

Circularity in …

22

More at country level:




• Demand for & invest in circularity by principals

• Top-5: Most important characteristics of a circular construction economy

• Top-5: Most important clients already asking for circularity

• Share of architects who:

• advise on sustainable building methods

• Specify more sustainable materials

• Design buildings that are easy to transform/dismantle

• Share of architectural projects in which circularity is taken into account (+ share of these projects which are

residential projects)

• Biggest obstacles towards a circular construction economy

• Required actions by manufacturers in order to move towards a more circular construction economy

23


Theme part:



Table of contents

Research background

24

Research objectives and phases

The objective of the European Architectural Barometer of Arch-Vision is to offer profound insight into the current economic situation and trends among architectural firms in the

Netherlands, Germany, the UK, France, Spain, Italy, Belgium and Poland. The European Architectural Barometer provides knowledge about the future building volumes and the

way in which these building volumes will be realized (trends).

Research objectives

Planning & Process each quarter

Draft questionnaire

Final questionnaire Fieldwork,

analysis, reporting

Report available

each quarter

MethodologyQuantitative phone research:175-200 interviews per country in France, Germany, Italy, Poland, Spain and the UK

100-125 interviews in the Netherlands and Belgium

Total: minimum of 1,250 interviews per quarter

Target group

Architects

Countries

Research topics 2018Costs

Q1: Media orientation and consumption

Q2: Trends in material usage

Q3: Future of prefab

Q4: Circular and sustainable construction

Yearly subscription fee: € 6,000

Includes:

• Four quarterly reports per year

• Possibility to give your input on the questionnaire

25

Research backgroundResponse

Response

Gross sample (all attempts to approach respondents) 1.948 1.853 1.732 1.097 1.252 1.058 2.306 1.158

Net sample (all approached respondents) 406 697 315 381 323 448 342 474

Completed interviews 175 175 180 176 175 118 105 176

Response percentage (interviews/net sample) 43% 25% 57% 46% 54% 26% 31% 37%

Sample and methodology of the research

• Most architectural firms have less than two FTE. Nevertheless, the focus of the European Architectural Barometer is on the larger firms. Therefore the research is only

conducted among architectural firms with two FTE and more. As the study is focussed on architects active in construction, architects that are solely active in interior or

landscaping are excluded from the research.

• The table below shows the number of successful interviews of each country. The difference between the gross sample of respondents that were reached (all reached

numbers) and the net sample of respondents that were reached, was caused by those architects who could not be contacted or had an incorrect phone number, and those

who did not meet the selection criteria (mostly due to the fact that the architectural firms had less than two FTE). The difference between the net sample of respondents

reached and the response are the number of architects who refused to participate.

73%

X% 59%

83%77%

64%

76%

54%

27%

X% 41%

17% 22%

35%24%

46%

UK GE FR SP IT NL BE PO

Number of FTE

Average XX XX XX XX XX XX XX XX

2 – 4 FTE

5 – 9 FTE

10 – 19 FTE

20 – 39 FTE

> 40 FTE

26

Research backgroundBackground of the respondents (architects)

• The table below shows the average number of employees of the architectural firms within the current quarter of this research, divided by country. The architectural firms with

one employee were excluded from this research.

• The second table shows the segment in which architects within this research are mostly active.

Segment mostly active (single response)

Housing

Non-Residential

61%

22%

9%

4%

4%

48%

30%

15%

6%

2%

47%

19%

22%

7%

5%

91%

7%

2%

0%

0%

77%

19%

2%

0%

2%

61%

30%

7%

2%

1%

51%

28%

13%

6%

2%

X%

X%

X%

X%

X%

Research background

27

Background of the respondents (architects)

New development or renovation

• The figure below shows the split in activities in new build and renovation.

• Just like previous quarters, Italy still seems to have the smallest new build market as only XX% claims to be mainly active in the new build. On the other hand, they have by far

the largest renovation market as more than half of the architects is mainly active in the renovation market.

25%

33%

X%

28%

X%

40%

31%

55%

25%

29%

X%

22%

X%

25%

19%

8%

50%

38%

X%

50%

X%

36%

50%

37%

New build Renovation Both as much

28


Theme part:



Table of contents

Appendix

29

About Arch-Vision

Con-

struction

volumes

Sister

company

Barometer

Arch-

Vision

Building

volumes

Interviews

The construction industry operates in a

delayed cyclical market, which means that

buildings designed today will not be ready until

at least two years from now. The economic

activities of architectural firms provide a strong

indication of the direction in which the

construction sector will develop in terms of

both building volumes and the way in which

building volumes will be realised.

Building volumes

Arch-Vision is a sister company of USP Marketing

Consultancy (www.usp-mc.eu), BouwKennis

(www.bouwkennis.nl), BauInfoConsult GmbH

(www.bauinfoconsult.de) and BuildInfoConsult

(www.buildinfoconsult.com). These are major

agencies each providing full-service research

support and specialised in the construction and real

estate markets.

Sister company

Architects have already been monitored by

several institutes in quite diverging ways

between the different countries. Arch-Vision

launched this European Architectural

Barometer for a more cohesive view. The

European Architectural Barometer is extremely

useful for organisations with a focus on Europe

that also want to compare the activities of

architects in different countries.

European Architectural Barometer

For decision makers charged with

considerations of company resources, staffing

and marketing strategy, a clear insight into

future construction volumes is essential.

However, economic indicators seldom provide

an adequate picture of these volumes.

Future construction volumes

All interviews are conducted by native

speakers. From the third measurement

onwards, two hundred interviews per country

have been completed per measurement. The

first two measurements were based on one

hundred interviews per country. Later, for the

Netherlands and Belgium, the measurements

returned to one hundred interviews.

Interviews

114

108105

101,8

124,3

103,2

118,2

60

70

80

90

100

110

120

130

140

150

Q1

'10

Q1

'11

Q1

'12

Q1

'13

Q1

'14

Q1

'15

Q1

'16

Q1

'17

Q1

'18

UK GE FR SP IT NL BE PO

Appendix

30

Volume index production: Construction

Index 2015=100, seasonally adjusted data

Source: Eurostat

* Includes Index of production of Buildings and Civil engineering works

According to Eurostat:

The production in

construction shows the

output and activity of the

construction sector. It

measures changes in the

volume of output on a

monthly basis.

Construction output

includes building

construction and civil

engineering.

Appendix

31

A line graph is also made for:

• Volume index production: Buildings

• Consumer confidence indicator

• Industrial confidence indicator

• Construction confidence indicator

Appendix

32

Results per segment

• For three key questions from the current measurement of the European Architectural Barometer, the results are divided by architects that realize most of their sales in the

residential segment (0% – 30% non-residential), by architects that realize sales in both segments (31% - 70% non-residential), and by architects that realize most of their sales

in the non-residential segment (71% - 100% non-residential).

• The tables on the following pages show the abovementioned split with regard to the following questions:

• How did the turnover develop in this quarter compared to the previous quarter?

• How did your order book develop in this quarter compared to the same quarter last year?

• Do you expect that your order book might be empty these coming 12 months?

Segment most active

0 - 30% non-residential 31 - 70% non-residential 71 - 100% non-residential

In most countries

architects realize

most of their sales

in the residential

segment.

53%

40%

28%

61%

50%

37%

44%

X%

27%

25%

38%

21%

33%

38%

36%

X%

20%

35%

34%

18%

17%

24%

20%

X%

X

X

X%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

-100

0

100

200

300

400

500

600

Q1 '1

1

Q1 '1

2

Q1 '1

3

Q1 '1

4

Q1 '1

5

Q1 '1

6

Q1 '1

7

Q1 '1

8

Appendix

33

Short-term outlook among German architects

2012 2013 2014 2015 2016 2017 2018

Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2-9 FTE

10 or more FTE

Q2Q Order Book Barometer (based on previous year)

Rolling Order Book Barometer (based on Q4 ’08)

Expect empty backlogcoming 12 months (%)

14% 17% 17% 16% 12% 13% 17% 19% 15% 19% 13%24% 14% 16% 22% 14% 20% 17% 18% 18% 16% 19% 20% 23% 25% 27% 21%

86% 83% 84% 85% 88% 87% 84% 82% 85% 81% 87%77% 86% 85% 78% 86% 80% 84% 82% 82% 85% 81% 80% 78% 75% 73% 79%

X

X

-100

0

100

200

300

400

500

600

Q1 '1

1

Q1 '1

2

Q1 '1

3

Q1 '1

4

Q1 '1

5

Q1 '1

6

Q1 '1

7

Q1 '1

8

Q2Q Turnover Barometer (based on previous quarter)

Rolling Turnover Barometer (based on Q2 '09)

Appendix

34

Short-term outlook

A short-term outlook is also available for:

• The United Kingdom

• France

• Spain

• Italy

• The Netherlands

• Belgium

• Poland

Development order book (based on previous year)

% sales in

non-residential

0 -

30

31 -

70

71 -

100

0 -

30

31 -

70

71 -

100

0 -

30

31 -

70

71 -

100

0 -

30

31 -

70

71 -

100

0 -

30

31 -

70

71 -

100

0 -

30

31 -

70

71 -

100

0 -

30

31 -

70

71 -

100

0 -

30

31 -

70

71 -

100

Strongly increased (>5%) XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX%

Slightly increased (0-5%) XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX%

Stayed the same (0%) XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX%

Slightly decreased (0-5%) XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX%

Strongly decreased (>5%) XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX%

Barometer order book XX XX XX XX XX XX XX XX XX XX XX XX XX XX XX XX XX XX XX XX XX XX XX XX

Appendix

35

Development turnover & order book

Development turnover (based on previous quarter)

% sales in

non-residential

0 -

30

31 -

70

71 -

100

0 -

30

31 -

70

71 -

100

0 -

30

31 -

70

71 -

100

0 -

30

31 -

70

71 -

100

0 -

30

31 -

70

71 -

100

0 -

30

31 -

70

71 -

100

0 -

30

31 -

70

71 -

100

0 -

30

31 -

70

71 -

100

Strongly increased (>5%) XX% XX% 19% XX% 4% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX%

Slightly increased (0-5%) XX% XX% 13% XX% 15% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX%

Stayed the same (0%) XX% XX% 69% XX% 78% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX%

Slightly decreased (0-5%) XX% XX% 0% XX% 4% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX%

Strongly decreased (>5%) XX% XX% 0% XX% 0% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX%

Barometer turnover XX XX 125 XX 109 XX XX XX XX XX XX XX XX XX XX XX XX XX XX XX XX XX XX XX

Appendix

36

Expectation empty order book in the next 12 months

Expectation empty order book in the next 12 months

% sales in

non-residential

0 -

30

31 -

70

71 -

100

0 -

30

31 -

70

71 -

100

0 -

30

31 -

70

71 -

100

0 -

30

31 -

70

71 -

100

0 -

30

31 -

70

71 -

100

0 -

30

31 -

70

71 -

100

0 -

30

31 -

70

71 -

100

0 -

30

31 -

70

71 -

100

Yes 18% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX%

No 77% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX%

Do not know 5% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX% XX%

2020 2019 2018

Resid

en

tial

New

-bu

ild

Resid

en

tial

Ren

ov

ati

on

No

n-r

esid

en

tial

New

-bu

ild

No

n-r

esid

en

tial

Ren

ov

ati

on

Resid

en

tial

New

-bu

ild

Resid

en

tial

Ren

ov

ati

on

No

n-r

esid

en

tial

New

-bu

ild

No

n-r

esid

en

tial

Ren

ov

ati

on

Resid

en

tial

New

-bu

ild

Resid

en

tial

Ren

ov

ati

on

No

n-r

esid

en

tial

New

-bu

ild

No

n-r

esid

en

tial

Ren

ov

ati

on

38.8 XX 26.0 XX

24.8 XX 17.4 XX

XX 18.0 XX 11.2

Appendix

37

Building volumes split in new-build and renovation, residential and non-residential

Amounts in billions at 2013 pricesSource: Eurostat

Appendix

38

Methodology calculation of the Q2Q Saldo and Barometer

• The European Architectural Barometer for the order book development and turnover development is calculated in the following way:

1. Respondents with a strong increase (>5%) are multiplied by 100

2. Respondents with a slight increase are multiplied by 50

3. Respondents that remained the same are multiplied by 0

4. Respondents with a slight decrease are multiplied by –50

5. Respondents with a strong decrease (>5%) are multiplied by –100

6. The sum of these values divided by 100, results in the Q2Q saldo.

7. Adding 100 to this saldo results in the Barometer figures, where 0 is the strongest possible decrease, 100 is stabilisation and 200 is the strongest possible increase. The

Barometer values calculated this way are presented in the report as Quarter to Quarter Turnover and Order book Barometer.

Example of calculation Q2Q Barometer value:

Development

Turnover SpainQ2 ’15

Calculated

Values

Increased by more than 5% 25% x 100 2500

Slightly increased (0-5%) 28% x 50 1400

Stayed the same (0%) 36% x 0 0

Slightly decreased (0-5%) 3% x -50 -150

Decreased by more than 5% 8% x -100 -800

• Q2Q Saldo = (2500 + 1400 – 150 – 800) / 100 = 30

• Q2Q Barometer value = 100 + 30 = 130

Appendix

39

Methodology calculation of the Q2Q Saldo and Barometer

• To calculate the developments in the turnover and the order book with regard to the first measurement in 2009, Arch-Vision has developed the so called Rolling Barometer.

• The Rolling Barometer is calculated as the cumulative sum of the Q2Q saldos of every quarter. The Rolling Barometer can drop or rise by 100 points per quarter at maximum.

• Example: The Rolling Order Book Barometer is -66 after twelve quarters. In the worst case (all architects reporting a decrease of over 5% every quarter) the Rolling Barometer

would be -1200. In the best case it would be 1200. Therefore a score of -66 in Q4 2011 means a slightly worse situation than in Q4 2008.

Barometer order book

Q1’09 Q2’09 Q3’09 Q4’09 Q1’10 Q2’10 Q3’10 Q4 ‘10 Q1 ‘11 Q2 ‘11 Q3 ’11 Q4 ‘11

Q2Q Barometer values 71 75 100 85 100 110 94 94 111 102 94 99

Saldo Q2Q Values -29 -25 0 -15 0 10 -6 -6 11 2 -6 -1

Rolling Barometer Values -29 -54 -54 -69 -69 -59 -65 -71 -60 -59 -65 -66

+ (-25) + (0) + (-15) + etc.

Appendix

40

Future building volumes: building a model – for prediction

• Architects are at the front of the construction sector. They are the

first to perceive positive and negative changes. The current

developments of architectural firms have a strong predictive impact

on the total market. Arch-Vision publishes its predictions for the

building volumes based on the developments experienced by

architects.

Building

volumes

• Arch-Vision uses a model based on eleven market indicators and

Arch-Vision’s own results. The model combines information about

the economy, like construction requests and confidence figures,

with data about the developments within architects’ experience,

such as changes in the turnover and the number of active

architects. Only information that proved to have a strong correlative

value on the building volume is used. Subsequently, every kind of

data is weighed based on the predictive value.

The model

• To ensure the correctness of the predictive value, the model has

been – with retroactive effects – compared to the actual growth and

shrinkage of the construction volume since 2003 for the Dutch*

market and since Q3 2009 for the remaining countries. The model

turns out to possess a very high predictive value. Nevertheless, the

forecast has to be interpreted with caution, as it remains a

calculation. As with all predictions, the margin of error can be

larger, comparable to the weather forecast: sometimes the Arch-

Vision model can be inaccurate.

High

predictive

value

• The predictive value is calculated based on the consistency of the

market indicators with construction volumes, for the renovation,

maintenance and the new build markets. The correlation is

determined by a regression analysis, i.e. a statistical technique for

analyzing data in which there is a (possible) specific connection,

known as regression.

Calculation

predictive

value

* Since 2003 the developments at architects in the Netherlands have been monitored by Arch-Visions’ sister organisation BouwKennis. Therefore, it is possible for the Netherlands to calculate the

connection between the architects and the building volume based on 10 years of data.

Appendix

41

Future building volumes: reliability of the model

• The reliability of a prediction model is closely related to the length of a series of data. A time series of nine years - and thus 36 quarters - is reliable to determine consistency.

However, the results of Arch-Vision do not go back that far. Additionally, in some countries - like Italy - figures such as building permits as well as consumer and producer

confidence are not always available for the last quarter (or last quarters).

• The reliability will therefore increase each quarter, as the time series will be getting larger and more consistent. The explanatory power of the model will continue to grow, as

calculations can be performed based on more periods (quarters).

Market volume

New build

Renovation

Maintenance

~40%Architect developments

and expectations

~60%Mix of market indicators

~25%Architect developments/expectations

~75%Mix of market indicators

Market influence

Market influence

Appendix

42

Future building volumes: Calculation

• The Dutch market has been taken as a basis. The correlation between market volume regarding new build, maintenance and renovation on the one hand, and possible

explanatory factors on the other hand, serves as a starting point.

• The correlation with building volumes is tested for a total of eleven market indicators together with two outcomes of the European Architectural Barometer. The correlation of

the following four indicators appeared to be strongest:

• Building permits – m² of useful floor area in non-residential buildings

• Building permits, number of dwellings

• Development of Turnover Barometer (European Architectural Barometer figures)

• Number of FTE working at architectural companies (European Architectural Barometer figures)

• The predicting value of these indicators is between 54% and 91%. Because a longer history of data was not available for most counties, the development of these four

indicators in the last four quarters and the four quarters before served as a guidance for this measurement. The used range of five indicators is not static and can be adjusted

for future calculations. With the database becoming more complete, more reliable correlations can adjust the mix of indicators. A longer range of regression measurements

shall replace the comparison of the last four quarters with the four quarters before.

• The forecast is based on the market knowledge of USP Marketing Consultancy together with the market figures available, such as building permits and the developments

amongst architects which are mainly active in renovation or new build as well as mainly active in residential or non-residential. Due to the limited number of quarters, a forecast

based on a statistical model is not possible for now. The model that was used has a lower prediction value for this period. However, USP Marketing Consultancy aims at

clarifying the general direction of the construction market development by publishing these data and the predictions will be updated in the coming reports.

Appendix

43

Questionnaire – Standard (these questions are asked every measurement)

1. How many employees (in FTE) does your company currently have, including yourself? [if less than 2 FTE, end of research]

2. What is your position?

3. As an architectural firm, are you mostly active in the segment housing, non-residential building, interior or landscaping? [If interior or landscaping, end of research]

4. How many employees in FTE did your company have at the end of 2017?



7. If your turnover should relate to housing and non-housing, what percentage of your revenue do you get from housing-related jobs?

8. Are you mostly active in new build or renovation?

9. How did the turnover develop this quarter compared to the previous quarter? Decreased by more than 5%; Slightly decreased (0-5%); Stayed the same (0%); Slightly

increased (0-5%); Strongly increased (more than 5%)

10. [If Increased with more than 5% or (very) strongly decreased ] Please specify how much in percentage was the increase/decrease the last quarter?

11. How did your order book develop in this quarter compared to the same quarter previous year? Decreased by more than 5%; Slightly decreased (0-5%); Stayed the same (0%);

Slightly increased (0-5%); Strongly increased (more than 5%)

12. How many projects have been postponed in this quarter?

13. How many projects were not started and cancelled in this quarter?

14. Do you expect that your order book might be empty these coming 12 months?

Appendix

44

Questionnaire – Theme questions: Circular and sustainable construction

1. What describes sustainable construction best according to you?

2. To what extent do your clients ask for sustainability and are they willing to invest more in it?

3. Which stakeholders do you see as the most important ones when it comes to making the existing building stock more sustainable?

4. What do you see as the most important characteristics of a circular construction economy?

5. To what extent do your clients ask for circularity and are they willing to invest more in it?

6. What kind of client is asking for circularity already? [if circularity is being asked for]

7. Can you make an estimation in what percentage of your projects circularity is taken into account?

8. And if so, what would be approximately the division between residential and non-residential projects?

9. To what extent do you agree with the following statements: [scale 1 to 5 where 1=strongly disagree and 5 is strongly agree]

• I advise on sustainable building methods

• I specify more sustainable materials

• I design buildings that are easy to transform or dismantle

10. When do you think we can speak of a fully circular construction economy?

11. What are the biggest obstacles towards a circular construction economy?

12. Which parties do you see as the most important ones that will drive the sector towards a circular construction economy?

13. What should manufacturers do to move towards a more circular construction economy?

Appendix

45

Questionnaire – Theme questions: Circular and sustainable construction

14. To what extent do you agree with the following statements? [scale 1 to 5 where 1=strongly disagree and 5 is strongly agree]

• Circular construction means that manufacturers will stay the owner of materials when applied (pay per use, leasing contracts etc.)

• Circular construction will only succeed when government will enforce it

• Circularity is mainly used as a selling argument

• Circular construction will only succeed if the actors in the construction process are changing their mindset

• A resource passport or Environmental Product Declaration (EPD) is necessary to capture the information about used products

46

Appendix

USP Marketing Consultancy

Total

70

Head office Subsidiary

Rotterdam Düsseldorf

Research AnalystsProject managers

Consultants

Market specialist installation, construction and DIY from the start

Dedicated and multi-client research

Active in the market for over 25 years

220 dedicated market research projectsin 2017

Revenue distribution

turnover coming from international projects

70%

turnover coming from dedicated market

research, 10% from multi client

90%

turnover coming from B2B, 30% B2C

70%

focus groups in-depth interviews

82 1.102

B2B CATI interviews

B2C online interviews

57.881 57.250

Research in

39countries in 2017

USP in figures

47

Appendix USP’s of USP

Deep knowledge of the

industry

Experienced in qualitative

and quantitative market

research

Dedicated market

research both B2B and

B2C

Market specialist for the

construction, DIY and

installation market for

over 25 years

Strong network of

partners covering all

major countries in the

world

Ability to conduct

research in multiple

countries at the same

time

Multi client reports

covering installers,

contractors, painters,

consumers and architects

Fact based consultancy

Dedication, honesty and

love for the industry

Ability to target all

relevant stakeholders in

the construction and DIY

markets

48

Appendix What we do – Dedicated market research

Examples Dedicated market research

• Tailor made

• Driven by your information needs

• Advice & consultancy based on facts and over 25 years of experience in the industry

• Worldwide coverage

• B2B, B2C, qualitative and quantitative research or a combination of both

• Within our market specialism, all types of researches can be conducted

• Targeting the right audience, with the right questions at the right time.

Segmentation Customerjourney

Branding Concept/product research

Customersatisfaction

Trends Distributionresearch

Marketexploration

Pricing Marketsize

49

Appendix What we do – Multi client research

Providing continuous information for our clients about their main target groups based on facts. Providing insights on key trends, turnover development, futurebuilding volumes, background characteristics of the target groups and much more.

European architectural

Barometer

8 countries

reports quarterly

6,400 interviews by

phone annually

Trends like BIM, DMU,

Media orientation and

future building

volumes

Architects

European contractors

monitor

8 countries

reports quarterly

6,400 interviews by

phone annually

Trends like BIM, DMU,


branding

Contractors

European mechanical

installation monitor

6 countries

reports quarterly

4,800 interviews by

phone annually

Trends like Branding,

purchase channels,


characteristics including

turnover and order book

developments

HVAC installers

European electrical

installation monitor

7 countries

reports quarterly

4,800 interviews by

phone annually

Trends like Branding,

purchase channels,


characteristics including

turnover and order book

developments

Electrical installers

Painter insights

8 countries

reports quarterly

6,400 interviews by

phone annually

Trends like mechanical

application, labour

shortage, purchase

points and branding

Painters

European home

improvement monitor

11 countries

reports quarterly

26,400 online interviews

annually

Trends like DIY vs

DFM, online buying,

branding and

information on a

product level

Consumers

50

Appendix Country scope

51

Appendix

Construction Installation DIY Living & Real Estate

Clients of USP

52

Appendix Trends & Vision in the market

Shifting decision making

Building information

modelling will become a

license to operate

Design, Build and

maintainSmart homes / offices Ageing society in Europe

Going from gas heating

towards electric

Prefab will become more

widespread

Online buying of products

by professionals

Changing role of the

wholesale

Qualitative & quantitative

labour shortage Europe

Building industry needs to

become smarter, faster

and cheaper

Digitisation

Increase influence

engineers & contractors

Changing role of the DIY

stores

For questions and more information

53

Jan-Paul Schop

Managing Director

[email protected]

+31 6 55786342

Jeroen de Gruijl

Project Manager Arch-Vision

[email protected]

+31 6 83979041

Dirk Hoogenboom

Research Consultant

[email protected]

+31 6 52098924

© 17 October, 2018 USP Marketing Consultancy B.V.

The information in this publication is strictly confidential and all relevant copyrights,

database rights and other (intellectual) property rights are explicitly reserved.

No part of this publication may be reproduced and/or published without the prior written

permission of USP Marketing Consultancy B.V.

Max Euwelaan 51

3062 MA Rotterdam

+31-10-2066900

[email protected]

https://www.usp-mc.nl/en/

Head office USP Marketing Consultancy B.V.

Max Euwelaan 513062 MA, Rotterdam

+31-10-2066900

+31-10-2066901

[email protected]

+31-10-8002700

www.usp-mc.nl

Where can you find us?

© 08 February 2019, USP Marketing Consultancy B.V.

The information in this publication is strictly confidential and all relevant copyrights, database rights and other (intellectual)

property rights are explicitly reserved. No part of this publication may be reproduced and/or published without the prior

written permission of USP Marketing Consultancy B.V.

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