1. STATE OF PLAY - FORECASTS FOR EUROPEAN CONSTRUCTION
Michael Weingärtler
European Builders Confederation Annual Meeting June Palermo, Italy

2. OVERVIEW Overall Trends in Construction Macro-economic Framework
Construction Outlook by Sectors
Housing
Non-residential construction
Civil Engineering

3. EUROCONSTRUCT NETWORKFI
EUROPE (EC-19) Austria, Belgium, Denmark, Finland, France, Germany, Ireland, Italy, Nether-lands, Norway, Portugal, Spain, Sweden, Switzerland, United Kingdom, Czech & Slovak Republic, Hungary, Poland.
BIG 5 Countries France, Germany, Italy, Spain, United Kingdom
Northern Europe Norway, Sweden, Finland, Denmark, Ireland
Smaller European Countries
Austria, Belgium, Netherlands, Portugal, Switzerland
Eastern Europe Czech Republic, Hungary, Slovak Republic, Poland NO SE DK IR UK NL PL DE BE CZ SK AT HU CH FR IT ES PT

4. But let‘s start with the recent macroeconomic trends and its impact on the construction industry.

5. DOUBLE DIP IN CONSTRUCTION
Source: EUROCONSTRUCT (Oslo 6/2014).

6. 2010 2011 2012 WHAT HAPPENED? (1) INCREASING WORLD TRADE
(2) DYNAMIC EXPORTS
(3) MACHINERY INVESTMENTS
EUROPEAN PUBLIC
DEBT CRISIS
(4) CONSTRUCTION INVESTMENTS
2010
2011
2012

7. THREE STEPS OF ECONOMIC RECOVERY
World Trade  Exports  
Construction 
Investments  Consumption
Time lag quarters quarters
2008
2009
2010
2011
2012
2013
2014
GDP
0.3
– 4.1
2.2
1.8
– 0.2
0.2
1.7
Exports
1.4
– 11.2
10.5
6.2
2.5
1.3
4.1
Fixed Capital Investment
– 0.9
– 12.0
0.6
2.1
– 2.3
– 1.7
3.1
Private Consumption
–1.2
0.5
– 0.4
Public Consumption
2.3
0.9
0.0
0.7
Construction
– 3.9
– 9.0
– 3.4
– 5.5
– 2.7
Source: EUROCONSTRUCT (OSLO 6/2014).

8. HOW WILL IT GO ON?
Source: EUROCONSTRUCT (Oslo 6/2014).

9. EUROPEAN CONSTRUCTION 2014
Volume: construction output per capita in mill. Euro (horizontal axis) Activity: real annual average growth 2014 in % (vertical axis)
low volume high volume
average volume
increasing activity
increasing activity
average growth
average growth
decreasing activity
decreasing activity
low volume high volume
Source: EUROCONSTRUCT (Oslo 6/2014).

10. European Construction – A 1.30 bn Euro Market (2013)
RENOVATION DOMINATES WESTERN CIVIL ENGINEERING & NON-RESIDENTIAL EASTERN EUROPE
European Construction – A 1.30 bn Euro Market (2013)
EC EC-4
TOTAL CIVIL ENGINEERING 22 bill. €
TOTAL CIVIL ENGINEERING 263 bill. €
NEW HOUSING bill. €
NEW HOUSING Mrd. €
18%
16%
21%
32%
16%
NEW NON-RESIDENTIAL
196 bill. €
30%
45%
22%
NEW NON-RESIDENTIAL 21 bill. €
BUILDING RENOVATION 15 bill. €
BUILDING RENOVATION 550 bill. €
Source: EUROCONSTRUCT (Oslo 6/2014). – Western Europe: Belgium, Denmark, Germany, Finland, France, Ireland, Italy, Great Britain, Netherlands, Norway, Austria, Portugal, Sweden, Switzerland, Spain. Eastern Europe: Czech Republic, Hungary, Poland, Slovak Republic.

11. SLOW RECOVERY IN CONSTRUCTION
gdp and construction output index 2010 = 100
without Poland
Source: EUROCONSTRUCT (Oslo 6/2014. – Western Europe: Belgium, Denmark, Germany, Finland, France, Ireland, Italy, Great Britain, Netherlands, Norway, Austria, Portugal, Sweden, Switzerland, Spain. Eastern Europe: Czech Republic, Hungary, Poland, Slovak Republic.

12. SLOW RECOVERY IN CONSTRUCTION
gdp and construction output index 2010 = 100
Source: EUROCONSTRUCT (Oslo, 2014). – Northern Europe: Denmark, Finland, Ireland, Norway, Sweden. Smaller Countries: Belgium, Netherlands, Austria, Portugal, Switzerland.

14. RECOVERY OF NEW HOUSING IN EUROPE
housing output index 2013 = 100
NEW HOUSING
TOTAL
HOUSING RENOVATION
Source: EUROCONSTRUCT (Oslo 6/2014) .

15. LONG TERM HOUSING IN EC-19
total housing output in billion Euro at 2013 prices
– 25%
+ 6%
Source: EUROCONSTRUCT (Oslo 6/2014).

16. BACK TO 2010 total housing output in billion Euro at 2013 prices
Source: EUROCONSTRUCT (Oslo 6/2014).

17. TOTAL HOUSING IN BIG-5 COUNTRIES
volume change in billion Euro
Source: EUROCONSTRUCT (Oslo 6/2014) .

18. HOUSING TRENDS – NORTHERN EUROPE
total housing output in billion Euro at 2013 prices
– 28%
+ 16%
Source: EUROCONSTRUCT (Oslo 6/2014). – Northern Europe: Denmark, Finland, Ireland, Norway, Sweden.

19. TOTAL HOUSING IN NORTHERN EUROPEAN COUNTRIES
Volume change in billion Euro
Source: EUROCONSTRUCT (Oslo 6/2014).

20. HOUSING TRENDS - Smaller Countries
total housing output in billion Euro at 2012 prices
– 11%
+ 4%
Source: EUROCONSTRUCT (Oslo 6/2014). – Northern Europe: Denmark, Finland, Ireland, Norway, Sweden. Smaller Countries: Belgium, Netherlands, Austria, Portugal, Switzerland.

21. TOTAL HOUSING - SMALLER COUNTRIES
volume change in billion Euro
Source: EUROCONSTRUCT (Oslo 6/2014).

22. HOUSING TRENDS – EASTERN EUROPE
total housing output in billion Euro at 2012 prices
– 24%
+ 9%
Source: EUROCONSTRUCT (6/2014). – Eastern Europe: Czech Republic, Hungary, Poland, Slovak Republic.

23. TOTAL HOUSING – EASTERN EUROPE
volume change in billion Euro
Source: EUROCONSTRUCT (Oslo 6/2014).

24. SIGNIFICANT GROWTH DIFFERENCES
average housing permits per 1000 inhabitants permits per 1,000 inhabitants
2 & less
Portugal
Spain
Hungary
2 < 3
Netherlands
Germany
Slovakia
Denmark
UK, Italy
Ireland
3 < 4
Sweden
Czech Republic
4 < 5
Belgium
Finland
Poland
5 & more
Austria
Norway
France
Switzerland
Source: EUROCONSTRUCT (Oslo 6/2014).

25. RENOVATION DOMINATES HOUSING OUTPUT IN WESTERN EUROPE
share of new construction and renovation in european housing markets in in %
New Housing
Housing Renovation
Source: EUROCONSTRUCT (Oslo 6/2014).

26. PUBLIC RENOVATION MEASURES AS REACTION TO THE LONG TERM ENERGY PRICE TREND
‘Oil-Crisis‘
Crude oil price trend – 2013
EU Public Debt Crisis
World Financial Crisis
2003 vs %
2009/10 +30%
2004/05
+45%
S: TECSON (

27. TOTAL HOUSING PRODUCTIONFI
average growth : 2.0% NO SE
Western Europe: 2.0% Eastern Europe: 2.8% DK IR UK NL PL DE
4% and above BE CZ SK
2% to less than 4% AT HU CH
1% to less than 2% FR
below 1% IT
shrinking market PT ES
Source: EUROCONSTRUCT (Oslo 6/2014) .

28. This brings us to non-residential construction.

29. MINOR RECOVERY IN EUROPEAN NON-RESIDENTIAL CONSTRUCTION
non-residential construction output index 2013 = 100
Source: EUROCONSTRUCT (Oslo 6/2014).

30. BEST OUTLOOK: NEW INDUSTRIAL CONSTRUCTION
new non-residential construction output index 2013 = 100
Source: EUROCONSTRUCT (Oslo 6/2014).

31. POOR NON-RESIDENTIAL PERFORMANCE
gdp & non-residential construction Output index 2010 = 100
Poland, excluded
Source: EUROCONSTRUCT (Oslo 6/2014). – Western Europe: Belgium, Denmark, Germany, Finland, France, Ireland, Italy, Great Britain, Netherlands, Norway, Austria, Portugal, Sweden, Switzerland, Spain. Eastern Europe: Czech Republic, Hungary, Poland, Slovak Republic.

32. BIG-5 EUROPEAN COUNTRIES MINOR GROWTH IN NON-RES. CONSTRUCTION
new non-residential construction output index 2013=100
BIG-5
United Kingdom
Germany
Italy
France
Spain
Source: EUROCONSTRUCT (Oslo 6/2014) .

33. NORTHERN COUNTRIES average growth 2013-2016: +2.6%
new non-residential construction output index 2013=100
Denmark
Finland
Ireland
Norway
Sweden
Source: EUROCONSTRUCT (Oslo 6/2014) .

34. SMALLER WESTERN EUROPEAN COUNTRIES average growth 2013-2016: +1.0%
new non-residential construction output index 2013=100
Netherlands
Portugal
Austria
Switzerland,
Belgium
Source: EUROCONSTRUCT (Oslo 6/2014).

35. CENTRAL EASTERN EUROPEAN COUNTRIES average growth 2013-2016: +2.5%
new non-residential construction output index 2013=100
Poland
Hungary
Czech Republic
Slovak Republic
Source: EUROCONSTRUCT (Oslo 6/2014).

36. NON-RESIDENTIAL OUTLOOKFI
average growth : 1.2% NO SE
Western Europe: 1.1% Eastern Europe: 2.6% DK IR UK NL PL DE
3% and above BE CZ SK
1.2% to less than 3% AT HU FR CH
0.6% to less than 1.2%
below 0.6% IT
shrinking market ES PT
Source: EUROCONSTRUCT (Oslo 6/2014).

38. CIVIL ENGINEERING OUTLOOK
gdp and civil engineering output index 2010 = 100
Poland, excluded
Source: EUROCONSTRUCT (Oslo 6/2014). – Western Europe: Belgium, Denmark, Germany, Finland, France, Ireland, Italy, Great Britain, Netherlands, Norway, Austria, Portugal, Sweden, Switzerland, Spain. Eastern Europe: Czech Republic, Hungary, Poland, Slovak Republic.

39. CIVIL ENGINEERING OUTLOOK
gdp and civil engineering output index 2010 = 100
Source: EUROCONSTRUCT (Oslo 6/2014). – Northern Europe: Denmark, Finland, Ireland, Norway, Sweden. Smaller Countries: Belgium, Netherlands, Austria, Portugal, Switzerland.

40. ROAD SECTOR DOMINATES CE
STRUCTURE IN CIVIL ENGINEERING PRODUCTION OUTPUT 2013
EC EC-4
TELECOM & OTHER CE 2 bn. €
TELECOM & OTHER CE 43 bn. €
ROADS bn. €
ROADS bn. €
WATER 4 bn. €
WATER 31 bn. €
ENERGY 40 bn. €
ENERGY 3 bn. €
RAILWAY
42 bn. €
RAILWAY
3 bn. €
OTHER TRAFFIC
20 bn. €
OTHER TRAFFIC
1 bn. €
Source: EUROCONSTRUCT (Oslo, 6/2013).

41. ENERGY SECTOR AS GROWTH DRIVER
total civil engineering output index 2010 = 100
Source: EUROCONSTRUCT (Oslo 6/2014).

42. CIVIL ENGINEERING OUTLOOK IN BIG-5 EUROPEAN COUNTRIES
total civil engineering output index 2013 = 100
Source: EUROCONSTRUCT (Oslo 6/2014).

43. CIVIL ENGINEERING OUTLOOKFI
average growth : 1.5% NO SE
Western Europe: 1.3% Eastern Europe: 4.5% DK IR UK NL PL DE
4.2% and above BE CZ SK
2% to less than 4.2% AT HU CH FR
0.5% to less than 2%
below 0.5% IT
shrinking market ES PT
Source: EUROCONSTRUCT (Oslo 6/2014).

44. SUMMARY Economic recovery is mainly driving European Housing
Civil Engineering
HIGHEST RISK SLOW AND UNSTABLE OVERALL ECONOMIC DEVELOPMENT