European construction growth likely to slow in the next two years

Euroconstruct sees its growth forecast for the European construction industry from 2019 to 2021 as falling. The growth peak for Europe as a whole was already achieved in 2017 with a 4.1% increase in production. In 2018, growth had already shrunk to 2.8% for the first time. 

By 2021, according to Euroconstruct, construction volume growth will continue to decline by around 1.6% per year. Compared to the pre-crisis year 2007, the market volume of the 19 Euroconstruct countries (EC19) will be still down by 15% in 2021. But if you exclude the extreme situations in Ireland, Spain and Portugal, the rest of the countries will have reached the level of 2007 again.

Due to slower growth in new construction, Euroconstruct expects the renovation to pick up in the coming years. In addition, the construction of multi-family homes will overtake those of individual buildings. For 2021, the share of multi-family homes in total housing construction is forecast at 58%.

For non-residential construction, Euroconstruct estimates 1.5% growth for the years to come by 2021. In 14 of 19 countries, this segment will continue to grow. In Germany and Great Britain, non-residential construction will be negatively affected by public construction, emphasizes Euroconstruct. In Germany, the reason for this is the shift in budget funds, in the UK Brexit and its consequences. An abrupt halt to the construction of public offices is expected here. Nevertheless, according to Euroconstruct, construction activity in the United Kingdom will be developing overall better than in Germany by 2021.

In Germany, Euroconstruct expects construction activity in 2019 to be at a similar level to 2018, after which a declining movement sets in. This will start in 2019 in Sweden and Finland. By contrast, in Austria and Switzerland, Euroconstruct expects a further increase until 2021, which will be stronger in Austria.

With the exception of Slovakia, the four Eastern European countries in the Euroconstruct group Poland, Hungary, the Czech Republic and Slovakia (EC4) will show a significant growth until 2021.

At the top of the index ranking list are Hungary, Poland and Portugal. At the bottom are Slovakia, Germany and Switzerland.