UK output is forecast to grow 2.4% in 1999 and 2.6% in 2000, it was revealed at the twice-yearly construction conference, which was held in Prague last week. Growth in Europe as a whole is expected to be 2.5% this year and 2.3% next.
Analysts' comments reflect this encouraging picture. They said UK housing is stronger than expected and that commercial work is going well.
However, they also voiced concerns about the continuing weakness of the industrial sector. "The real fear going into 2000 is of drying up after the completion of the millennium projects," said one analyst.
"The UK is trundling along and is probably coming to the top of its cycle," said another, adding that "it probably has two or three years of growth left." The latest figures are an update on December forecasts and show a rise in confidence across Europe, particularly in France and Spain.
French output growth forecasts were upgraded from 2.7% to 4.4% for this year and from 1.8% to 2.7% for 2000. Housing is providing the uplift. The number of new starts for this year was expected to rise 3.8%, but this has been revised to 9.6%.
It was housing completions that drove up output forecasts in Spain – from 4% output growth to 6.3% for 1999 and from 3% to 4.5% for the following year.
One analyst said: "What is remarkable is that Spanish housing completions – at 400 000 – are predicted to be higher than those in Germany, at 390 000. That is amazing when you consider that, in 1997, Spain had 272 000 completions against Germany's 501 000. The market appears to be booming." Reduced growth forecasts for Germany were not unexpected among analysts. Euroconstruct predicted a fall of 0.1% in 1999 and 1% growth in 2000.
Ireland, in contrast, is going through a period of "stunning optimism", according to one analyst. Growth this year was forecast at 12.6% and at 8.9% in 2000.
The figures show that Eastern Europe continues to play a minor role in European construction. Of the 19 countries represented by Euroconstruct, the four East European nations – Poland, the Czech Republic, Slovakia and Hungary – represent only 4% of the total European construction output.
