The European Construction Industry Federation (FIEC) has forecast a fall in construction activity of as much as 8.5% this year with a grim warning that the situation could get worse in 2021.
Eric Haglund
Construction
Photo: Eric Haglund
In FIEC's annual statistics report released earlier this month, the association said the last months of 2020 would be critical for the sector with new projects expected to decline in the Autumn.
“We… estimate a decline in investments in total construction by 8.5%.”, said Rüdiger Otto, FIEC Vice-President Economic & Legal Affairs.
“The situation might worsen in 2021 if investments in construction, both public and private, do not recover significantly. Moreover, due to losses in equity during the health crisis, companies will find it difficult to embark on new projects.”
Otto added that it was imperative the sector learns the correct lessons from the 2008 financial crisis, which saw significant drops in investment in non-residential public building and civil engineering projects.
“These segments took much longer to recover than those primarily driven by private investments," he said.
“Ambitious recovery packages which, on the one hand, support households and private companies in their recovery and, on the other hand, increase the share of public investments in construction, are essential to restore the entire economy’s health, thanks to the multiplier effect that it provides.“
The report shows that total investment in construction in the EU27 in 2019 was €1,324 billion - 9.5% of the bloc's GDP and year-on-year growth of 2.6%.
It also showed that after a positive start in 2020, the coronavirus outbreak hit the construction sector hard with lockdowns and restrictions put in place in most countries.
- Read the full FIEC report.
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