Confidence slipping in Europe’s construction sector
By Mike Hayes06 September 2022
In its latest EU Construction Outlook report, economic and financial analyst ING notes construction output overall for June was 2.3% lower than in February.
Specifically, the report highlights significant declines in output for Austria (-6.3%) and Germany (-4.5%), where labour and materials shortages are hitting the construction industry hard.
The highest year-on-year growth, according to the report, is seen in Poland (6.7%).
While the report’s confidence indicator remains in positive figures, EU contractors report being less confident about their order books moving forward, as well as the continuing supply chain issues.
On balance, ING forecasts growth overall of around 1% for the year.
In August, 23% of respondents reported production issues, caused by a shortage of materials.
While noting a slight decline in the price of steel, ING highlighted an escalation of concrete, cement and brick prices, due primarily to production processes becoming more expensive as energy costs soar.
In April, 50% of respondents to the ING survey stated they would be raising prices to pass on some of these extra costs. This, says ING, is the highest percentage expecting to raise prices since the survey began in 1985.
Another cause for concern highlighted by the report is that of water. Following months of low rainfall, waterborne freight transport is now affected, with barges having to reduce loads due to low water levels.
This again is exacerbating the problem with already high materials prices.