2013 77 pressrelease

PRESS RELEASE

77th EUROCONSTRUCT Conference 13th June 2014, Oslo Embargo until: Friday, 13th June 2014, 09.00

THE ORGANIZER

Prognosesenteret AS www.prognosesenteret.no www.euroconstruct.no

Contact: Bjorn-Erik Oye / bjorn.erik.oye@prognosesenteret.no / +47 24 11 58 80 www.euroconstruct.org

The European construction market is reaching firmer ground. The Euroconstruct report published in Oslo, 13/6, suggests an average growth of 1.8 percent a year, in real terms, from 2014 to 2016.

It’s mainly new residential buildings contributing to the upturn but the tentative recovery affects all sub sectors. The growth rate is weak given the low starting level but after a handful of hard and turbulent years, any sign of stability and recovery is welcome.

The Euroconstruct (EC-19) countries’ collective GDP (measured at exchange rates) grew by 0.2 percent in 2013, but growth is expected pick up to about 2 percent a year in 2014-2016. France and Italy is having the weakest outlook were Poland and the Slovak economy could grow by as much as 3.5 percent a year in 2015 and 2016. Inflation is low and the recovery will most likely be a protracted one, as high unemployment and debt, low investment, tight credit, and financial fragmentation in the Euro area continue to dampen domestic demand.

Aggregated construction output for the EC countries fell by 2.7 percent in real terms last year, extending the negative trend started in 2008. The forecast suggests that the decline in construction output bottomed out last year, measured at constant prices, on the lowest in 20 years. Euroconstruct expect investments to grow on average by 1.8 percent a year in 2014-2016, in real terms, an upward revision of 0.2 percentage points from our previous forecast in November 2013. Even if the volume of construction works should grow as projected in the forecasting period, output and capacity utilization in the European construction sector as a whole will remain at near-depression levels.

Prognosesenteret AS www.prognosesenteret.no www.euroconstruct.no

Contact: Bjorn-Erik Oye / bjorn.erik.oye@prognosesenteret.no / +47 24 11 58 80 www.euroconstruct.org

New residential construction in total is expected to grow by 3.2 percent on average in 2014-2016 and residential renovation and maintenance (R&M) by only 1.2 percent a year, pulling down average growth in total residential construction to 2 percent a year in real terms. Although most EC countries are clear of recession, sluggish domestic demand growth and weak public sector finances will most likely continue to dampen non-residential building demand for some time. Euroconstruct expects total non-residential construction on average to increase by 1.5 percent a year in 2014-2016 in real terms, an upward revision of 0.3 percentage points from our previous prognosis. Total civil engineering works is now expected to grow on average by 1.9 percent a year in 2014-2016 in real terms, compared to 1.5 percent in our previous forecast. The adjustment is mainly a result of a brighter outlook for new civil engineering.

Prognosesenteret AS www.prognosesenteret.no www.euroconstruct.no

Contact: Bjorn-Erik Oye / bjorn.erik.oye@prognosesenteret.no / +47 24 11 58 80 www.euroconstruct.org

There are big differences within the EC-19 countries. Ireland and Poland could see an average growth of 9 percent and 6 percent respectively in 2014-2016, measured at constant prices. The UK, Denmark and Hungary are also among the fast growing construction markets, with average growth rates of 34 percent a year. In the other end of the scale, we find the Czech Republic and Spain where construction output looks set to remain below 2013 levels. The outlook is very different when the EC countries’ average expected construction output in the forecasting period is compared to their average between 2003 and 2013. Then Poland, Norway and Switzerland have the highest relative level, while Spain, Ireland and Portugal are at the bottom of the table.

Prognosesenteret AS www.prognosesenteret.no www.euroconstruct.no

Contact: Bjorn-Erik Oye / bjorn.erik.oye@prognosesenteret.no / +47 24 11 58 80 www.euroconstruct.org

TOTAL CONSTRUCTION OUTPUT % change in real terms (volume)

Volume mill. euro 2013

Forecast

Outlook

2010

2011

2012

2013

2014

2015

2016

Austria

33 570

-3.9

2.5

2.5

0.7

1.2

1.3

0.7

Belgium

38 515

0.4

4.4

0.4

-1.2

0.3

1.7

2.2

Denmark

26 504

-6.1

6.1

-1.1

-1.4

2.5

3.1

4.3

Finland

28 813

5.9

2.5

-3.4

-2.3

0.8

1.0

1.7

France

205 696

-5.9

4.1

0.0

-3.3

-1.2

0.0

1.4

Germany

280 241

2.5

5.2

-1.2

0.2

2.9

1.6

0.6

8 253

-28.0

-15.3

-16.1

-2.4

9.7

6.1

11.7

167 129

-5.9

-2.2

-6.1

-3.3

0.2

1.0

1.7

Netherlands

59 697

-9.3

3.8

-7.1

-4.1

-0.7

3.7

4.6

Norway

47 030

-1.4

6.3

4.9

-0.1

0.4

4.1

3.2

Portugal

15 293

-6.2

-10.0

-15.5

-14.5

0.0

2.5

3.5

Spain

64 575

-17.9

-20.3

-31.2

-18.8

-5.0

0.9

3.4

Sweden

31 650

3.9

3.1

-2.4

1.2

4.4

1.3

0.9

Switzerland

51 956

2.7

2.7

2.9

0.3

2.0

0.4

1.9

Ireland Italy

United Kingdom Western Europe (EC-15) Czech Republic Hungary Poland Slovak Republic Eastern Europe (EC-4) Euroconstruct Countries (EC-19)

168 632

7.7

2.0

-8.4

1.2

4.4

4.7

3.0

1 227 554

-3.5

0.0

-5.5

-2.5

1.2

1.9

2.0

15 811

-7.3

-3.8

-7.7

-6.9

-3.8

-0.7

1.2

7 835

-8.8

-9.7

-4.2

5.8

4.1

2.6

3.2

42 021

4.7

11.7

-3.2

-8.8

4.2

7.2

6.7

4 382

-3.6

-2.8

-13.8

-5.3

1.7

3.1

2.9

70 048

-0.8

4.3

-5.1

-6.7

2.2

4.7

5.0

1 297 602

-3.4

0.2

-5.5

-2.7

1.3

2.0

2.2

Source: EUROCONSTRUCT (77th Conference)

Prognosesenteret AS www.prognosesenteret.no www.euroconstruct.no

Contact: Bjorn-Erik Oye / bjorn.erik.oye@prognosesenteret.no / +47 24 11 58 80 www.euroconstruct.org