Economic forecast shows worrying signs for European construction market – Business Leader

Nov 25, 2022
Nov 25, 2022
Nov 25, 2022
Nov 23, 2022
Nov 16, 2022
Nov 09, 2022
Nov 25, 2022
Nov 25, 2022
Nov 25, 2022
Business Leader Magazine is produced bi-monthly. Subscribe to receive a regular copy of Business Leader magazine delivered to your door or to access our digital edition.

Business Leader hosts in-person and online events including prestigious business awards.
29th November 2022 8:00 am
30th November 2022 8:00 am
22nd June 2023 6:30 pm
28th September 2023 6:30 pm
2nd November 2023 6:30 pm
Business Leader hosts world-class national and regional business awards.
22nd June 2023 6:30 pm
2nd November 2023 6:30 pm
28th September 2023 6:30 pm
Alternative Finance
Corporate Finance
Business Group
Story by
Oli Ballard
November 21, 2022
EuroConstruct’s latest economic forecasts predict that construction output growth will drop to 0% in 2024 across Europe.
Despite a more positive 2022 with 3.0% growth expected, construction output is likely to be weaker than previously thought, with no recovery expected until 2025.
The figures were revealed at EuroConstruct’s 94th economic forecast event in London, where experts from Experian and Barbour ABI shared the latest trend data.
Experian UK chief economist, Mohammed Chaudhri comments: “During the past six months, there have been enormous changes in Europe that have impacted the economic operating environment of construction.
“The Ukraine war and the manifold impacts and uncertainties it induces, rising interest rates, the tightening of the financial market, and the ongoing problems with construction material availability and costs are all playing a significant part.
“EuroConstruct’s November forecast found that nearly all factors which affect construction demand are negative, including the economy, consumer prices, interest rates and consumer confidence. It looks like it could be a rough period of adjustment for the industry, before a return to growth in 2024.”
Residential leads downturn
Much of the negative outlook is driven by the new residential and residential renovation sectors. The era of low interest rates led to a boom in new-build housing across Europe, but the situation has changed substantially in the past six months. Housing sales have slowed down, consumer confidence has dropped and there is now oversupply in many countries.
The result is that the growth outlook for next year’s new residential construction has turned negative, dropping by 3.4% from the previous forecast.
The picture does not improve when looking at the construction sector as a whole. Barbour ABI chief economist, Tom Hall adds: “The construction industry is experiencing headwinds from multiple directions and things are changing quickly. The economic growth predictions for 2023 have moved accordingly. It was only as recently as June that we were expecting 2.2% growth in GDP – this is now as little as 0.5%.
“Businesses would do well to diversify their portfolios, especially if they are focused on residential projects. There is a glimmer of light though, with civil engineering looking more positive as many countries invest in low-carbon energy and renovate existing infrastructure.”
Country by Country
Italy is the best performer in Europe, with a high growth level of 12.1% driven in part by EU subsidies.
The UK, currently one of the worst-performing economies in Europe, faces a negative construction output growth cycle in 2023 (0.4%) alongside Germany, which faces negative or stagnating outlook for growth all the way up to 2025 (-0.4%).
Construction will also contract in contract in eight countries, the most in Sweden and Finland. In both these countries, construction has been high, so the decline partially marks a return to a more normal construction volume.
Share This Article
Nov 25, 2022 |Financial Services
Nov 25, 2022 |Economy & Politics
Nov 25, 2022 |Funding
Nov 25, 2022 |Funding
Nov 25, 2022 |Economy & Politics
Nov 24, 2022 |Economy & Politics
© Copyright 2022 Business Leader Ltd | Terms & Conditions | Cookie Policy | Privacy Policy

Sign up and find out why our readers call our newsletter the most influential in Business. Get the UK’s leading business content straight to your inbox every week.

By submitting your details you confirm that you agree to the storing and processing of your personal data by Business Leader Ltd as described in the privacy statement.

By signing up to receive the Business Leader newsletter you will receive breaking business news, exclusive interviews and original content three times a week to your inbox. You may also receive invitations to our events and please do get in touch with us to let us know what type of content you like best.

By submitting your details you confirm that you agree to the storing and processing of your personal data by Business Leader Ltd as described in the privacy statement.

Thank you for subscribing to the Newsletter.

An email confirmation will be sent to you shortly.

Already have an account? Sign in here
By registering with Business Leader you confirm that you agree to our terms & conditions and our privacy statement.
Your account has successfully been created.
Please login to your account to set your preferences.
Don’t have an account? Register here
Lost your password?
Fill out the form below to get emailed a password reset link.
Your password reset link has been sent, please check your email.


Sharing Is Caring:

Leave a Comment