Exploratory work is currently underway on the new Brenner Tunnel, the final base tunnel (at valley floor level) envisaged under the Alps as part of the Trans-European Transport Network (TEN-T) project.
DELAYED RECOVERY The eurozone debt crisis will delay the recovery in Europe’s construction market for at least another year. Chris Sleight reports.
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orecasts for the construction industry made 18 months ago were confidently predicting a rebound in activity in 2012, following the recession that began at the end of 2008 with the global banking crisis. However, the high national debt levels that followed on from the crisis and pushed the eurozone to the brink of collapse towards the end of last year look certain to delay the recovery in construction. Unlike the broad European economy, which bounced back into growth in 2009 and is now tipping back into a mild recession, the construction sector never got its head above water. So it would be inaccurate to say it has seen a double-dip recession, but with negative growth for four straight years, including the crushing falls of 2009 and 2010, the industry could be said to be in a depression. But as ever, a broad headline figure for Europe hides a huge range of different national dynamics. The most sickly construction markets are of course the southern and other peripheral countries that have the worst debt 8 Industry Europe
problems. In contrast, Germany, the Nordic region and parts of central Europe are showing respectable growth. Specialist forecasting body Euroconstruct says overall construction activity in Europe will shrink 0.3 per cent this year. This contrasts to the 1.3 per cent growth the group expected in its summer 2011 outlook, before the debt crisis really hit home. This follows on from the 0.6 per cent contraction seen last year – more or less what was expected without the sovereign debt issues. The expectation now is for a return to growth in 2013, with a 1.8 per cent increase in activity. An moderate acceleration in 2014 should see the value of the market return to about €1300 billion, so even if this recovery does materialise, the absolute value of the market will be a big step below what was seen half a decade before. As one may expect in the current climate of austerity across Europe, it is the publicly funded parts of the industry that are seeing the biggest cutbacks. First and foremost this
means civil engineering work, a segment that stayed afloat well throughout the recession thanks to government stimulus spending. In addition to infrastructure projects, the market for publicly funded buildings such as schools, hospitals and municipal structures is also looking weak. Growth prospects for both the residential and private non-residential markets are far from spectacular, due to the atmosphere of economic uncertainty that the eurozone crisis has generated. However, the weak prospects of the new-build sector are contrasted by a relatively bright outlook for repair & maintenance activity.
Chinese interest In terms of talking points, it has been a long time since there was an issue such as the saga of Chinese state-owned contractor COVEC’s ill fated attempt to break into the European market. COVEC won a contract to construct a 50km stretch of the A2 motorway in Poland in 2009, a high-profile project,
