At one of its twice-yearly conferences in January, Euroconstruct is set to report that European construction output grew 3% during 1999, making it, in terms of growth, the second best year for European builders since 1994. This is 0.5% higher than its previous June forecast. It has also upgraded its forecast for 2000, from 2.1% to 2.4% growth.
The UK market in 1999 is one percentage point below the European average. However, the figures, obtained exclusively by Building, show the UK growing by 2.7% in 2000, whereas France, Italy and Spain are all expecting growth to slow.
Responding to the UK figures, Alastair Stewart, analyst at Robert Fleming, said he thought the UK was showing some signs of “topping out” but that key sectors would still see good growth for a few years to come.
“There is still room for an increase in PFI work and big infrastructure projects, and the leisure sector is still expanding,” he said. “Maintenance is also on the increase, particularly with the pressure on Railtrack and the utilities companies for greater investment.”
Germany, which accounts for one-quarter of total European output, appears to be pulling out of its long recession. After a 4.1% fall in output growth in 1998, then a 0.2% fall in 1999, 1% growth is forecast for 2000. However, the figures do no take into account the impact of the crisis facing Philipp Holzmann, Germany’s second-largest contractor.
Analysts say the west German market in particular is showing signs of revival. “There are a lot of tower cranes in Frankfurt at the moment because office developers are moving in on the back of the establishment of the European Central Bank,” said Stewart.
Spain was the star performer of 1999, with growth of 10.2%, up on 6.1% the previous year. This is far higher than Euroconstruct’s prediction in June of 6.3%. France’s figures for 1999 have been upgraded from 4.4% to 5.7%, thanks mainly to lower interest rates and a flurry of private housebuilders rushing to take advantage of government tax breaks that ran out in September. And Italy’s figures, at 3.3% for 1999, also benefited from lower interest rates and greater public spending.
The full figures will be unveiled at Euroconstruct’s conference on 6-7 of January at Churchill College, Cambridge. Contact Sarah Willatts, 0171-680 4406.
