STATE OF PLAY - FORECASTS FOR EUROPEAN CONSTRUCTION STATE OF
PLAY - FORECASTS FOR EUROPEAN CONSTRUCTION Michael Weingrtler
[email protected] European Builders
Confederation Annual Meeting 2014 20 June 2014 - Palermo,
Italy
Slide 2
OVERVIEW Macro-economic Framework Overall Trends in
Construction Construction Outlook by Sectors Housing
Non-residential construction Civil Engineering
Slide 3
EUROCONSTRUCT NETWORK EUROPE (EC-19) Austria, Belgium, Denmark,
Finland, France, Germany, Ireland, Italy, Nether-lands, Norway,
Portugal, Spain, Sweden, Switzerland, United Kingdom, Czech &
Slovak Republic, Hungary, Poland. BIG 5 Countries France, Germany,
Italy, Spain, United Kingdom Northern Europe Norway, Sweden,
Finland, Denmark, Ireland Smaller European Countries Austria,
Belgium, Netherlands, Portugal, Switzerland Eastern Europe Czech
Republic, Hungary, Slovak Republic, Poland ES FR PT IR UK FI SE NO
DE PL DK AT HU CH CZ SK IT NL BE
Slide 4
Slide 5
DOUBLE DIP IN CONSTRUCTION Source: EUROCONSTRUCT (Oslo
6/2014).
Slide 6
WHAT HAPPENED? (1) INCREASING WORLD TRADE (2) DYNAMIC EXPORTS
(3) MACHINERY INVESTMENTS (4) CONSTRUCTION INVESTMENTS EUROPEAN
PUBLIC DEBT CRISIS
Slide 7
THREE STEPS OF ECONOMIC RECOVERY 2008200920102011201220132014
GDP0.3 4.12.21.8 0.20.21.7 Exports1.4 11.210.56.22.51.34.1 Fixed
Capital Investment 0.9 12.00.62.1 2.3 1.73.1 Private
Consumption0.21.21.40.5 0.40.21.4 Public Consumption2.3 0.90.0
0.60.7 Construction 3.9 9.0 3.40.2 5.5 2.71.3 Investments
Consumption World Trade Exports Construction Time lag 2-4 quarters
2-4 quarters Source: EUROCONSTRUCT (OSLO 6/2014).
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HOW WILL IT GO ON? Source: EUROCONSTRUCT (Oslo 6/2014).
Slide 9
EUROPEAN CONSTRUCTION 2014 low volume high volume decreasing
activity low volume high volume Volume: construction output per
capita in mill. Euro (horizontal axis) Activity: real annual
average growth 2014 in % (vertical axis) average volume average
growth increasing activity decreasing activity increasing activity
Source: EUROCONSTRUCT (Oslo 6/2014).
Slide 10
RENOVATION DOMINATES WESTERN CIVIL ENGINEERING &
NON-RESIDENTIAL EASTERN EUROPE 21% 18% 22% 30% 16% BUILDING
RENOVATION 550 bill. 16% 32% 45% NEW HOUSING 218 bill. NEW NON-
RESIDENTIAL 196 bill. TOTAL CIVIL ENGINEERING 263 bill. NEW HOUSING
11 Mrd. NEW NON- RESIDENTIAL 21 bill. EC-15 EC-4 BUILDING
RENOVATION 15 bill. TOTAL CIVIL ENGINEERING 22 bill. Source:
EUROCONSTRUCT (Oslo 6/2014). Western Europe: Belgium, Denmark,
Germany, Finland, France, Ireland, Italy, Great Britain,
Netherlands, Norway, Austria, Portugal, Sweden, Switzerland, Spain.
Eastern Europe: Czech Republic, Hungary, Poland, Slovak Republic.
European Construction A 1.30 bn Euro Market (2013)
Slide 11
SLOW RECOVERY IN CONSTRUCTION Source: EUROCONSTRUCT (Oslo
6/2014. Western Europe: Belgium, Denmark, Germany, Finland, France,
Ireland, Italy, Great Britain, Netherlands, Norway, Austria,
Portugal, Sweden, Switzerland, Spain. Eastern Europe: Czech
Republic, Hungary, Poland, Slovak Republic. gdp and construction
output index 2010 = 100 without Poland
Slide 12
SLOW RECOVERY IN CONSTRUCTION Source: EUROCONSTRUCT (Oslo,
2014). Northern Europe: Denmark, Finland, Ireland, Norway, Sweden.
Smaller Countries: Belgium, Netherlands, Austria, Portugal,
Switzerland. gdp and construction output index 2010 = 100
Slide 13
Slide 14
RECOVERY OF NEW HOUSING IN EUROPE NEW HOUSING TOTAL HOUSING
RENOVATION Source: EUROCONSTRUCT (Oslo 6/2014). housing output
index 2013 = 100
Slide 15
LONG TERM HOUSING IN EC-19 total housing output in billion Euro
at 2013 prices 25 % + 6% Source: EUROCONSTRUCT (Oslo 6/2014).
Slide 16
BACK TO 2010 total housing output in billion Euro at 2013
prices Source: EUROCONSTRUCT (Oslo 6/2014).
Slide 17
TOTAL HOUSING IN BIG-5 COUNTRIES volume change in billion Euro
Source: EUROCONSTRUCT (Oslo 6/2014).
Slide 18
HOUSING TRENDS NORTHERN EUROPE 28 % + 16% total housing output
in billion Euro at 2013 prices Source: EUROCONSTRUCT (Oslo 6/2014).
Northern Europe: Denmark, Finland, Ireland, Norway, Sweden.
Slide 19
TOTAL HOUSING IN NORTHERN EUROPEAN COUNTRIES Volume change in
billion Euro Source: EUROCONSTRUCT (Oslo 6/2014).
Slide 20
HOUSING TRENDS - Smaller Countries 11 % + 4% Source:
EUROCONSTRUCT (Oslo 6/2014). Northern Europe: Denmark, Finland,
Ireland, Norway, Sweden. Smaller Countries: Belgium, Netherlands,
Austria, Portugal, Switzerland. total housing output in billion
Euro at 2012 prices
Slide 21
TOTAL HOUSING - SMALLER COUNTRIES volume change in billion Euro
Source: EUROCONSTRUCT (Oslo 6/2014).
Slide 22
HOUSING TRENDS EASTERN EUROPE 24 % + 9% Source: EUROCONSTRUCT
(6/2014). Eastern Europe: Czech Republic, Hungary, Poland, Slovak
Republic. total housing output in billion Euro at 2012 prices
Slide 23
TOTAL HOUSING EASTERN EUROPE volume change in billion Euro
Source: EUROCONSTRUCT (Oslo 6/2014).
Slide 24
2 & less Portugal Spain Hungary 2 < 3 Netherlands
Germany Slovakia Denmark UK, Italy Ireland 3 < 4 Sweden Czech
Republic 4 < 5 Belgium Finland Poland 5 & more Austria
Norway France Finland Switzerland SIGNIFICANT GROWTH DIFFERENCES
average housing permits per 1000 inhabitants 2013-2016 3.5 permits
per 1,000 inhabitants Source: EUROCONSTRUCT (Oslo 6/2014).
Slide 25
RENOVATION DOMINATES HOUSING OUTPUT IN WESTERN EUROPE Housing
Renovation New Housing share of new construction and renovation in
european housing markets in 2013 in % Source: EUROCONSTRUCT (Oslo
6/2014).
Slide 26
PUBLIC RENOVATION MEASURES AS REACTION TO THE LONG TERM ENERGY
PRICE TREND S: TECSON (www.tecson.de) 2004/05 +45% 2009/10 +30%
2003 vs 2012 +430% Oil-Crisis Crude oil price trend 1960 2013 EU
Public Debt Crisis World Financial Crisis
Slide 27
TOTAL HOUSING PRODUCTION ES FR PT IR UK FI SE NO DE PL DK AT HU
CH CZ SK IT NL BE average growth 2013-2016: 2.0% 4% and above 2% to
less than 4% 1% to less than 2% below 1% shrinking market Western
Europe: 2.0% Eastern Europe: 2.8% Source: EUROCONSTRUCT (Oslo
6/2014).
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Slide 29
MINOR RECOVERY IN EUROPEAN NON-RESIDENTIAL CONSTRUCTION
non-residential construction output index 2013 = 100 Source:
EUROCONSTRUCT (Oslo 6/2014).
Slide 30
BEST OUTLOOK: NEW INDUSTRIAL CONSTRUCTION Source: EUROCONSTRUCT
(Oslo 6/2014). new non-residential construction output index 2013 =
100
Slide 31
POOR NON-RESIDENTIAL PERFORMANCE Poland, excluded gdp &
non-residential construction Output index 2010 = 100 Source:
EUROCONSTRUCT (Oslo 6/2014). Western Europe: Belgium, Denmark,
Germany, Finland, France, Ireland, Italy, Great Britain,
Netherlands, Norway, Austria, Portugal, Sweden, Switzerland, Spain.
Eastern Europe: Czech Republic, Hungary, Poland, Slovak
Republic.
Slide 32
BIG-5 EUROPEAN COUNTRIES MINOR GROWTH IN NON-RES. CONSTRUCTION
Germany United Kingdom Italy France Spain BIG-5 new non-residential
construction output index 2013=100 Source: EUROCONSTRUCT (Oslo
6/2014).
Slide 33
NORTHERN COUNTRIES average growth 2013-2016: +2.6% Denmark
Ireland Finland Sweden Norway new non-residential construction
output index 2013=100 Source: EUROCONSTRUCT (Oslo 6/2014).
Slide 34
SMALLER WESTERN EUROPEAN COUNTRIES average growth 2013-2016:
+1.0% Netherlands Austria Switzerland, Belgium Portugal new
non-residential construction output index 2013=100 Source:
EUROCONSTRUCT (Oslo 6/2014).
Slide 35
CENTRAL EASTERN EUROPEAN COUNTRIES average growth 2013-2016:
+2.5% Hungary Poland Czech Republic Slovak Republic new
non-residential construction output index 2013=100 Source:
EUROCONSTRUCT (Oslo 6/2014).
Slide 36
NON-RESIDENTIAL OUTLOOK ES FR PT IR UK FI SE NO DE PL DK AT HU
CH CZ SK IT NL BE average growth 2013-2016: 1.2% 3% and above 1.2%
to less than 3% 0.6% to less than 1.2% below 0.6% shrinking market
Western Europe: 1.1% Eastern Europe: 2.6% Source: EUROCONSTRUCT
(Oslo 6/2014).
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Slide 38
CIVIL ENGINEERING OUTLOOK gdp and civil engineering output
index 2010 = 100 Poland, excluded Source: EUROCONSTRUCT (Oslo
6/2014). Western Europe: Belgium, Denmark, Germany, Finland,
France, Ireland, Italy, Great Britain, Netherlands, Norway,
Austria, Portugal, Sweden, Switzerland, Spain. Eastern Europe:
Czech Republic, Hungary, Poland, Slovak Republic.
Slide 39
CIVIL ENGINEERING OUTLOOK gdp and civil engineering output
index 2010 = 100 Source: EUROCONSTRUCT (Oslo 6/2014). Northern
Europe: Denmark, Finland, Ireland, Norway, Sweden. Smaller
Countries: Belgium, Netherlands, Austria, Portugal,
Switzerland.
Slide 40
ROAD SECTOR DOMINATES CE ENERGY 40 bn. STRUCTURE IN CIVIL
ENGINEERING PRODUCTION OUTPUT 2013 ROADS 84 bn. RAILWAY 42 bn.
EC-19EC-4 OTHER TRAFFIC 20 bn. ROADS 9 bn. RAILWAY 3 bn. TELECOM
& OTHER CE 2 bn. OTHER TRAFFIC 1 bn. WATER 31 bn. ENERGY 3 bn.
WATER 4 bn. TELECOM & OTHER CE 43 bn. Source: EUROCONSTRUCT
(Oslo, 6/2013).
Slide 41
ENERGY SECTOR AS GROWTH DRIVER total civil engineering output
index 2010 = 100 Source: EUROCONSTRUCT (Oslo 6/2014).
Slide 42
CIVIL ENGINEERING OUTLOOK IN BIG-5 EUROPEAN COUNTRIES total
civil engineering output index 2013 = 100 Source: EUROCONSTRUCT
(Oslo 6/2014).
Slide 43
CIVIL ENGINEERING OUTLOOK ES FR PT IR UK FI SE NO DE PL DK AT
HU CH CZ SK IT NL BE average growth 2013-2016: 1.5% 4.2% and above
2% to less than 4.2% 0.5% to less than 2% below 0.5% shrinking
market Western Europe: 1.3% Eastern Europe: 4.5% Source:
EUROCONSTRUCT (Oslo 6/2014).
Slide 44
SUMMARY Economic recovery is mainly driving European Housing
Civil Engineering HIGHEST RISK SLOW AND UNSTABLE OVERALL ECONOMIC
DEVELOPMENT