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STATE OF PLAY - FORECASTS FOR EUROPEAN CONSTRUCTION

STATE OF PLAY - FORECASTS FOR EUROPEAN CONSTRUCTION. Michael Weingärtler. michael.weingaertler@euroconstruct.org. European Builders Confederation Annual Meeting 2014 20 June 2014 - Palermo, Italy. OVERVIEW. Macro-economic Framework

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STATE OF PLAY - FORECASTS FOR EUROPEAN CONSTRUCTION

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  1. STATE OF PLAY - FORECASTSFOR EUROPEAN CONSTRUCTION Michael Weingärtler michael.weingaertler@euroconstruct.org • European BuildersConfederation Annual Meeting 2014 20 June 2014 - Palermo,Italy

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

  3. EUROCONSTRUCT NETWORK FI • 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 CountriesFrance, Germany, Italy, Spain, United Kingdom Northern EuropeNorway, Sweden, Finland, Denmark, Ireland Smaller European Countries • Austria, Belgium, Netherlands, Portugal, Switzerland • Eastern EuropeCzech Republic, Hungary,Slovak Republic, Poland NO SE DK IR UK PL NL DE BE CZ SK AT HU CH FR IT ES PT

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

  5. WHAT HAPPENED? (1) INCREASING WORLD TRADE (2) DYNAMICEXPORTS (3) MACHINERYINVESTMENTS EUROPEAN PUBLIC DEBT CRISIS (4) CONSTRUCTION INVESTMENTS 2010 2011 2012

  6. THREE STEPS OF ECONOMIC RECOVERY  InvestmentsConsumption   World Trade Exports Construction Time lag 2-4 quarters 2-4 quarters Source: EUROCONSTRUCT (OSLO 6/2014).

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

  8. EUROPEAN CONSTRUCTION 2014 Volume: construction output per capita in mill. Euro (horizontal axis)Activity: real annual average growth 2014 in % (vertical axis) lowvolumehighvolume averagevolume increasingactivity increasingactivity averagegrowth averagegrowth decreasingactivity decreasingactivity lowvolumehighvolume Source: EUROCONSTRUCT (Oslo 6/2014).

  9. RENOVATION DOMINATES WESTERN CIVIL ENGINEERING & NON-RESIDENTIAL EASTERN EUROPE European Construction – A 1.30 bn Euro Market (2013) EC-15 EC-4 TOTAL CIVILENGINEERING22 bill. € TOTAL CIVILENGINEERING263 bill. € NEW HOUSING218 bill. € NEW HOUSING11 Mrd. € 18% 16% 21% 32% 16% NEW NON-RESIDENTIAL 196 bill. € 30% 45% 22% NEW NON-RESIDENTIAL21 bill. € BUILDING RENOVATION15 bill. € BUILDING RENOVATION550 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.

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

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

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

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

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

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

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

  18. HOUSING TRENDS - Smaller Countries total housing outputin 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.

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

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

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

  22. SIGNIFICANT GROWTH DIFFERENCES average housing permits per 1000 inhabitants 2013-20163.5 permits per 1,000 inhabitants Source: EUROCONSTRUCT (Oslo 6/2014).

  23. RENOVATION DOMINATES HOUSING OUTPUT IN WESTERN EUROPE shareofnewconstructionandrenovation in europeanhousingmarkets in 2013 in % New Housing HousingRenovation Source: EUROCONSTRUCT (Oslo 6/2014).

  24. EU Public DebtCrisis World Financial Crisis ‘Oil-Crisis‘ PUBLIC RENOVATION MEASURES AS REACTION TO THE LONG TERM ENERGY PRICE TREND 2003 vs2012+430% 2009/10+30% Crudeoilpricetrend 1960 – 2013 2004/05 +45% S: TECSON (www.tecson.de)

  25. TOTAL HOUSING PRODUCTION FI averagegrowth2013-2016: 2.0% NO SE Western Europe: 2.0%Eastern Europe: 2.8% DK IR UK NL PL DE 4% andabove BE CZ SK 2% tolessthan 4% AT HU CH 1% tolessthan 2% FR below 1% IT shrinkingmarket PT ES Source: EUROCONSTRUCT (Oslo 6/2014) .

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

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

  28. POOR NON-RESIDENTIAL PERFORMANCE gdp & non-residential construction Outputindex 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.

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

  30. NORTHERN COUNTRIESaverage growth 2013-2016: +2.6% new non-residential construction outputindex 2013=100 Denmark Finland Ireland Norway Sweden Source: EUROCONSTRUCT (Oslo 6/2014) .

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

  32. CENTRAL EASTERN EUROPEAN COUNTRIESaverage growth 2013-2016: +2.5% new non-residential construction outputindex 2013=100 Poland Hungary Czech Republic SlovakRepublic Source: EUROCONSTRUCT (Oslo 6/2014).

  33. NON-RESIDENTIAL OUTLOOK FI NO averagegrowth2013-2016: 1.2% SE Western Europe: 1.1%Eastern Europe: 2.6% DK IR UK PL NL DE 3% andabove BE CZ SK 1.2% tolessthan 3% AT HU FR CH 0.6% tolessthan 1.2% below 0.6% IT shrinkingmarket ES PT Source: EUROCONSTRUCT (Oslo 6/2014).

  34. CIVIL ENGINEERING OUTLOOK gdpandcivilengineeringoutputindex 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.

  35. CIVIL ENGINEERING OUTLOOK gdpandcivilengineeringoutputindex 2010 = 100 Source: EUROCONSTRUCT (Oslo 6/2014). – Northern Europe: Denmark, Finland, Ireland, Norway, Sweden. Smaller Countries: Belgium, Netherlands, Austria, Portugal, Switzerland.

  36. ROAD SECTOR DOMINATES CE STRUCTURE IN CIVIL ENGINEERING PRODUCTION OUTPUT 2013 EC-19 EC-4 TELECOM & OTHER CE2 bn. € TELECOM & OTHER CE43 bn. € ROADS 84bn. € ROADS 9bn. € WATER4 bn. € WATER31 bn. € ENERGY 40 bn. € ENERGY 3 bn. € RAILWAY 3 bn. € RAILWAY 42 bn. € OTHER TRAFFIC 1 bn. € OTHERTRAFFIC 20 bn. € Source: EUROCONSTRUCT(Oslo, 6/2013).

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

  38. CIVIL ENGINEERING OUTLOOK IN BIG-5 EUROPEAN COUNTRIES total civilengineeringoutputindex 2013 = 100 Source: EUROCONSTRUCT (Oslo 6/2014).

  39. CIVIL ENGINEERING OUTLOOK FI averagegrowth2013-2016: 1.5% NO SE Western Europe: 1.3%Eastern Europe: 4.5% DK IR UK PL NL DE 4.2% andabove BE CZ SK 2% tolessthan 4.2% AT HU CH FR 0.5% tolessthan 2% below 0.5% IT shrinkingmarket ES PT Source: EUROCONSTRUCT (Oslo 6/2014).

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

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