European construction market expected to post steady growth in 2019

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Construction activity is steadily rising across all of the EU countries, supported by low interest rates and stable economic growth.  Economic stability has in turn resulted in decrease in unemployment, thus boosting consumer and business confidence that the future is better. Steady growth in construction industry in Europe has recorded increased inflow of public and private investment. The European construction market is likely to also witness a shift in its growth engine from residential construction to infrastructure sector. As a result, there are medium to large scale business opportunities in the region.

Residential Construction

Over the forecast period, residential building construction market is projected to increase at a CAGR of 5.2%. Currently, multi-family housing segment accounts for 34% of total residential construction and it is expected to increase to 39% by 2023.

Over the forecast period, growth in new residential building construction segment is expected to be and building renovation markets, and where collective housing is likely to override with 58% over 42% of individual housing by 2021.

The forecast from a structural point of view predicts that regions population will keep growing steadily. This along with policy reforms will drive residential construction sector.

Nordic countries of Europe have witnessed a 17.4% increase in the number of newly constructed houses in a year from 84,973 in 2014 to 99,744 units as of 2017. Central and East European countries will continue to increase spend on housing.

Non-residential Construction

During the 2019-2023 period, the non-residential building construction market is expected to grow at 3.2% on an average. Commercial building construction segment is expected to reach US$ 470 billion by 2023. Nordic region is acting as growth engine for European construction industry, a trend expected to continue over the forecast period. Owing to the effects of Brexit, many public buildings and offices are reversing the non-residential market in the UK and Germany.

Infrastructure Construction

By 2019, infrastructure construction sector is expected to rise at 3.5% - 5.5% annually. Key focus will be on roads and railways renovation.

There are major differences in the outlook of different countries across Europe in terms of growth. Construction growth during 2019-2023 will be 3.0% in Eastern European countries, while the Western Europe will see an increase of 4.8% per annum.

Key Trends:

• Rapid Automation: One of the key reasons for European Construction industry to progress is the ongoing need for automation. The trend brings people from different platforms to come together to better the output while reducing costs and failures.
• Shortage of Workers: There is labour shortage across Europe in both quantitative and qualitative terms. Main reasons include lack of skilled labour, increasing costs, reduced pay, as well as high attrition of experienced labour and reduced choice or appeal by younger generation.
• Demand for Prefabrication: The demand for prefabricated construction in Europe is expected to continue to increase as it fulfils the need for faster, cheaper and smarter building process.  According to ConsTrack360’s latest survey, this is a key trend which will gain momentum over the forecast period.
• Demand for Green Building: One of the key trends in the construction industry in Europe is the need for sustainability. The countries are looking for green building solutions that will help save and protect the environment.  Goals and regulations are being drafted regularly to combat the impact of global warming for sustainability in construction.

To know more and gain deeper understanding of construction industry in Europe, click here.