EU construction sector hit by weak investment growth, high costs
LONDON, January 10, 2023
The outlook for construction sector in Western Europe remains gloomy, with activity being hit by a decline in investor confidence amid a looming economic recession, said an industry expert ahead of a key webinar.
"The output will be severely hampered by weak investment growth, and high prices for key construction materials and energy costs, a trend that has been exacerbated by the impact of the Ukraine war given the importance of commodity supplies from Russia and Ukraine," explained Danny Richards, the Lead Economist on Construction at GlobalData, a leading data and analytics company.
To be hosted by GlobalData on January 18, the webinar will put spotlight on 2023 predictions for the global construction industry, with a specific focus on the industry’s performance across major markets in Europe.
The key topics to be discussed at the upcoming event include:
*The major challenges facing the construction industry in Europe
*The best-performing markets in 2022
*The prospects for growth in 2023
*The policies and programs that will help to drive construction activity in key markets.
In July last year, top analysts CIC-Market Solutions had forecast that construction activity would decline in 2023.
The assumption was based on a reduction in spending ability in France and Germany, as well as the potential impact from interest rate rises, supply bottlenecks and further energy price rises in the context of the war in Ukraine.
The main risk factors cited then were rising rates, higher costs and supply shock.
"The effects from a triple economic shock that has been observed since summer 2021 and which has been increasing since the war began in Ukraine, should be transmitted, albeit with a time lag, to the construction sector by the end of the year with the full effect in 2023," the CIC-Market Solutions had stated in its 2022 report.
According to industry experts, inflation is having a further punishing effect on the pace of construction.
Arcadis, a leading global natural and built asset design and consultancy firm, had last year stated that the European and North American construction sector had seen double-digit cost increases during 2021 and the screw had tightened further in H1.
Prices for cement and other materials are expected to continue to rise over the next few months, on top of already promising price increases, it added.-TradeArabia News Service
