European construction is at its lowest this year, Czech construction will decline

Prague - European construction this year has hit its bottom, and from next year, construction output is expected to grow again, albeit at a very slow pace. This is according to the latest forecast from the industry association Euroconstruct, which was provided to ČTK by Euroconstruct member company ÚRS Praha. However, construction in the Czech Republic will have to wait; growth is unlikely to occur even in 2015.
At the beginning of this year, Euroconstruct estimated that Czech construction output fell by 5.4 percent year-on-year last year, but in reality, Czech construction fell by 7.7 percent. Therefore, the association has significantly worsened its outlook for this year, now expecting a decline of 8.2 percent, whereas at the start of the year, it estimated a decline of 1.9 percent. In the following years, the decline in Czech construction is expected to slow, but even in 2015, the sector does not anticipate growth. This is expected to occur only in 2016.
Construction in all 19 countries associated with Euroconstruct fell by 5.2 percent last year. It is expected to decline again this year, by a clean three percent.
   "For 2014, only a negligible growth of around 0.9 percent is anticipated, with a slight recovery of 1.8 percent in 2015," the Euroconstruct report states. The development of construction output significantly correlates with the state of the economy. "The state of household, corporate, and state budgets is reflected in the willingness to invest in new construction or renovations of existing buildings. The halt in economic growth in GDP indicators after 2007 and 2011 fundamentally impacted the rapid decline in construction output across all types of construction, namely residential, non-residential, and civil engineering," the association adds, noting that the total volume of construction in Euroconstruct member countries has decreased by 22 percent from 2007 to this year. In constant prices, this represents 360 billion euros.
Euroconstruct also predicts that the most significant development in the coming years will occur in residential construction, which could increase by 5.9 percent between 2013 and 2015. Civil engineering is expected to grow by 45 percent during the same period, and non-residential construction will increase by 3.7 percent.
However, the association warns of significant differences between individual countries. For example, the Czech Republic is among those with the worst outlook. Next year, it has a worse prognosis than only Spain, and in 2015, according to Euroconstruct, domestic construction along with Spain will be the only sectors out of the 19 monitored countries that will show a year-on-year decline.
Euroconstruct is a European association of 19 specialized research organizations. It has been active since 1975. It regularly publishes updated short-term and medium-term forecasts for European markets. The member states of the association include 19 European countries, including the Czech Republic.

Source: Euroconstruct, 76th conference