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European construction sector observatory

European construction sector observatory

The European construction sector observatory (ECSO) is an initiative under COSME. It regularly analyses and carries out comparative assessments on the construction sector in all 28 EU countries – aiming to keep European policymakers and stakeholders up to date on market conditions and policy developments.

What are ECSO's objectives?

  • to monitor market conditions and trends, as well as national/regional strategies and progress towards the 5 priorities of construction 2020
  • to encourage knowledge sharing and the replication of good practice
  • to raise awareness on policy measures and initiatives impacting the construction value chain

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Country fact sheets

ECSO profiles the construction industry in the 28 EU countries, and produces detailed country fact sheets (CFS) for each country. Each CFS provides an analysis of key figures, macro-economic indicators, economic drivers, issues and barriers, innovation, the national/regional policy and regulatory framework, and the current status and national strategy to meet construction 2020 objectives.

To view and download ECSO findings, please click on a country on the map below. All EU countries have data available and are marked in blue.

Austria

The number of enterprises in the broad construction sector in Austria totalled 74,614 in 20161 (Figure 1), with the construction sub-sector (NACE F) accounting for 46.5% of the total firms. Overall, the number of enterprises in the broad construction sector increased by 11.2% between 2010 and 2016, mostly driven by the 11.5% growth in real estate activities, followed by 11.3% in the narrow construction and 11.2% in architectural and engineering activities.

Production in construction of buildings experienced a 5.9% increase between 2010 and 2013, followed by a 4.5% drop by 2016, however a 1.2% increment is recorded over the period of 2010-2016. Similarly, production in civil engineering rose up by 14.4% in 2014, which was the highest since 2010, followed by a slight decrease of 3.1% in 2016 keeping a 10.8% increase since 2010 (Figure 2).

The total added value of the broad construction sector amounted to EUR 33.9 billion in 20162, with the narrow construction subsector contributing to 48.8% of the total added value3, followed by real estate activities (28.3%), manufacturing (12.2%) and architectural and engineering activities (10.7%) (Figure 3). The share of gross value added of the broad construction sector in the GDP reached 17.0% in 2014, slightly above the EU-28 average of 16.9%, with real estate activities having the largest contribution (8.7%) (Figure 4).

1 Please note that this 2016 data is a nowcast - please refer to the methodology notes for further details.

2 Please note that this 2016 data is a nowcast - please refer to the methodology notes for further details.

3 Please note that the share of each sub-sector in the value added of the broad construction sector should not be compared to the shares of the Gross Value Added in the GDP, since the GDP also includes taxes and excludes subsidies.

Belgium

The number of enterprises in the broad construction sector in Belgium totalled 186,454 in 20161 (Figure 1), with the construction sub-sector (NACE F) accounting for 60.3% of the total firms, followed by 23.1% of real estate activities. The number of enterprises in the broad construction sector has increased by 21.4% during the period 2010-2016, mainly led by the real estate sub-sector, which has doubled the number of companies. Production in construction of buildings dropped by 1.8% between 2010 and 2016, the largest decline among all sub-sectors, while the construction sub-sector decreased only by 0.8% over the same period of time. Conversely, production in civil engineering experienced a 10% growth until 2012 and it has been decreasing ever since, however it overall rose up by 2.7% between 2010 and 2016.

The total value added of the broad construction sector amounted to EUR 30.4 billion in 20162, with the construction sub-sector contributing to 57.1% of the total3 (EUR 17.4 billion), followed by real estate activities (EUR 5.9 billion, i.e. 19.5% of the total), manufacturing (EUR 4.0 billion, i.e. 13.3% of the total) and architectural and engineering activities (EUR 3.1 billion, 10.1%) (Figure 3). The share of gross value added of the broad construction sector in the GDP reached 14.4% in 2014, slightly below the EU-28 average of 16.9%, with the real estate sub-sector having the largest contribution (Figure 4).

1 Please note that this 2016 data is a nowcast - please refer to the methodology notes for further details.

2 Please note that this 2016 data is a nowcast - please refer to the methodology notes for further details.

3 Please note that the share of each sub-sector in the value added of the broad construction sector should not be compared to the shares of the Gross Value Added in the GDP, since the GDP also includes taxes and excludes subsidies.

Bulgaria

Following strong growth, the Bulgarian construction sector is considered to be one of the most promising sectors in the Bulgarian economy for the second consecutive year.

In fact, the total construction output is expected to increase by 5.6% in 2018 and 5.7% in 2019. After a difficult year in 2016, which saw EU funds suspended, the construction sector has grown again in 2017. In fact, between 2010 and 2017, the total added value of the sector increased by 33.8%, driven by a strong growth in the real estate activities, narrow construction and manufacturing sectors. The low and declining interest rates on mortgages since 2010, rising incomes and increased consumer and business confidence are supporting the growth of the real estate activities.

In addition, the productivity of the sector also increased significantly (+42.3%) between 2010 and 2015, which is partly explained by increased investments in innovation.

However, the construction sector also faces challenges. First labour shortage may limit the development of the construction sector, and its ability to absorb EU funds supporting infrastructures development. Second, while the number of newly built dwellings fell sharply ( 46.8% between 2010 and 2017), the number of unsold newly built dwellings reaches 24% in Sofia, and 43% in rural areas. This may be linked to the growing inflation, and the price increase of housing, which prevents especially the bottom 40% of the population in terms of income from investing in the housing market. Third, though the business environment improved in recent years, it remains heavily regulated, and public procurement - not fully transparent. This comes especially at the expense of SMEs, which reportedly suffer more than large construction companies.

The high dependence on EU funds and the limited financial resources of the public sector constitute a threat to the long-term prospects of the national construction sector.

In 2018, a New Housing Strategy will be introduced, to tackle some of the challenges mentioned above. In particular, the strategy will focus mostly on establishing working mechanism for adequate management and maintenance of the housing stock; providing affordable housing and; build a National Housing Framework, in charge of financing the objectives of the policy.

The outlook for the sector is promising, primarily due to increased investments in infrastructure, with EU funds constituting the main source of financing in Bulgaria. Notably, the European Structural and Investment Funds (ESIF) will provide Bulgaria with a total of EUR 9.9 billion for 2014-2020. The two largest allocations are for Environment Protection and Resource Efficiency and for Network Infrastructures in Transport and Energy. Thus, the infrastructure market is expected to be the driving force behind the growth of the construction sector in the coming years.

The government has also introduced measures to mobilise investments in the energy efficient renovation of buildings, with the support of international financial institutions and EU funds. Notably, the National Green Investment Scheme mobilised a total of BGN 32 million (EUR 16.4 million), whereas the National Programme for Energy Efficiency of Residential Buildings, with a budget of BGN 1 billion (EUR 511 million), seeks to renovate up to 70,000 apartment blocks with the support of the EIB, CEB and World Bank. An additional BGN 661 million (EUR 339 million) for energy efficiency measures in the building stock will be provided under the Operational Programme ‘Regional Development’ 2014-2020.

Croatia

In 20161, there were 31,146 enterprises operating in the broad construction sector in Croatia, with the construction sub-sector (NACE F) accounting for 57.6% of the total number of firms (Figure 1).

Compared to 2010, the number of firms operating in the broad construction sector decreased by 20.4%, with the real estate sub-sector experiencing the greatest drop (-30.2%.), followed by construction (-27.3%) and manufacturing (-11.2%). Conversely, the number of enterprises in architectural and engineering activities increased by 19.0% during the same period. Production in construction dropped significantly between 2010 and 2015, but showed signs of improvements in 20162, as reflected in Figure 2. In general terms, the volume index of production in construction fell by 30.1% since 2010. This decline was led by the construction buildings, which decreased by 33.6%, whereas production of civil engineering decreased by 26.7%.

The total added value3 of the broad construction sector amounted to EUR 3.2 billion in 20164 with the construction sub-sector accounting for 55.2% of the total (EUR 1.8 billion), followed by manufacturing (18.7%) architectural and engineering activities (13.7%) and real estate activities (12.7%) (Figure 3). The share of gross value added of the broad construction sector in GDP reached 16.0% in 2014, with real estate activities having the largest contribution (Figure 4).

1 Please note that this 2016 data is a nowcast - please refer to the methodology notes for further details.

2 Please note that this 2016 data is a nowcast - please refer to the methodology notes for further details.

3 Please note that the share of each sub-sector in the value added of the broad construction sector should not be compared to the shares of the Gross Value Added in the GDP, since the GDP also includes taxes and excludes subsidies.

4 Please note that this 2015 and 2016 data is a nowcast - please refer to the methodology notes for further details.

Cyprus

The number of enterprises in the broad construction sector in Cyprus totalled 11,994 in 20161 (Figure 1), with the construction sub-sector (NACE F) accounting for 66.4% of the total firms. Overall, the number of enterprises in the broad construction sector decreased by 12.3% from 2010 to 2016. Company growth has been positive in two of the four sub-sectors from 2010 to 2016, namely in engineering activities and related technical consultancy as well as in real estate activities which grew respectively by 11.6% and 16.5%. On the other hand, the construction and manufacturing sub-sector saw a decrease by respectively 17.1% and 11.3%. Despite the overall decrease, both sectors have been following an upward path in recent years. In line with the drop in the number of companies, production has decreased dramatically from 2010 to 2016, by 47%. However, since 2014, production has picked up again (Figure 2).

The total added value of the broad construction sector amounted to EUR 777.6 million in 20162 with the construction sub-sector contributing to 68.7% of the total3 (EUR 534.6 million), followed by manufacturing contributing to 16.1% of the total, real estate activities with 7.8%, and architectural and engineering activities with 7.3% (Figure 3). The share of gross value added of the broad construction sector in the GDP reached 13.4% in 2014, with real estate activities having the largest contribution (Figure 4). This is below the EU-28 average, which stood at 16.9% in 2016.

1 Please note that this 2016 data is a nowcast - please refer to the methodology notes for further details.

2 Please note that this 2016 data is a nowcast - please refer to the methodology notes for further details.

3 Please note that the share of each sub-sector in the value added of the broad construction sector should not be compared to the shares of the Gross Value Added in the GDP, since the GDP also includes taxes and excludes subsidies.

Czech Republic

The Czech construction sector started recovering in 2014 after several years of recession. The progress was halted in 2016 with slowing down of EU funding, but it picked up again in 2017.

The Czech construction has not yet recovered fully from the crisis and still performed below the 2010 levels. Investment in the broad construction sector declined by 12.4% over 2010-2016. This was driven by a fall in the non-residential and civil engineering segment ( 22.3%), which was partly compensated by a sharp increase in dwellings related investments (+40.3%). As a result, production in construction dropped by 10.9% over 2010-2017, with production in construction of buildings and civil engineering falling by 2.9% and 27.0%, respectively in the same period. Moving forward, prospects around the Czech broad construction sector seem positive, with an output expected to grow by 7.3% and 14.7% in 2018 and 2019 respectively in comparison to 2015.

To offset the declining investments and improve the underdeveloped transport infrastructure, the Czech government put in place the Transport Policy of the Czech Republic for 2014–2020 with the Prospect of 2050. It foresees an annual amount of CZK 43 billion (EUR 1.6 billion) in investment to be used both for construction of new transport infrastructure (particularly TEN-T) as well as for maintenance. Moreover, the State Fund for Transport Infrastructure (SFDI), with a budget of CZK 52 billion (EUR 2 billion) for 2017, represents a key instrument in the sector. European Structural and Investment Funds (ESIF) contribute to the development of road and rail infrastructure through an allocation of EUR 7.6 billion for network infrastructures in transport and energy over 2014-2020.

The housing market is characterised by an increase in demand, fuelled by record-low mortgage rates and rising household incomes. However, even though building permits for residential buildings increased significantly (+23.0% between 2015 and 2017 only), supply is lagging behind, partly due to slow administrative procedures for obtaining construction permits. As a result, house price index increased at the fastest pace in the EU. Such a growth even outpaced the growth of wages (raising questions regarding housing affordability). In this context, the State Housing Development Fund (SHDF) provides various financing programmes to support housing policy, particularly the regeneration of the existing housing stock, the reduction of its energy consumption and the construction and reconstruction of dwellings and residential buildings, including rental social housing. The Housing Support Programme 2016 2020 also supports the development and diversification of housing and construction activities through several financing sub-programmes.

With regard to sustainable construction and energy efficiency, the government recently approved the Concept of the Implementation of BIM, containing a schedule for the phasing-in of BIM in the years 2018-2027 and stating the planned enforcement of BIM in public procurement contracts by 2022.

The outlook for the coming years is encouraging, with GDP growth predicted at 3.4% in 2018 and 2.3% in 2019, driven by an overall strong economic outlook and positive residential and non-residential market developments. However, the construction sector is still hampered by restrictive building regulations, low absorption of EU funds and a critical shortage of qualified workers.

Denmark

The Danish construction sector has been on the revival path since 2010, in line with the overall improvement in the general economy. In 2017, there were 64,383 enterprises in the broad construction sector in Denmark, with the construction sub-sector accounting for 49.4% of the total. The number of firms in the broad construction sector has increased by 6.5% since 2010, with architectural and engineering activities experiencing the greatest growth (+8.7%). Production in the construction of buildings has been recovering since 2010, exceeding the 2010 level by 21.4% in 2017.

The residential housing market has been the main driver of the construction industry in the last few years, with rising housing prices of 3 to 4%, reflecting a housing demand growing faster than the supply. House prices, which had experienced a sharp decline in 2009 following the burst of the housing bubble, picked up with the house price index for total dwellings being 20.6% above the 2010 level in 2017. Specifically, new dwellings reported the highest increase (+147.0% since 2010) and this increase is particularly marked in larger urban areas, particularly in Copenhagen and Aarhus. At the same time, growing house prices and high levels of household indebtedness make the economy more sensitive to shocks.

Denmark is a leader in eco-innovation and sustainable construction, with a variety of funding schemes available to support R&D projects related to the development of innovative eco-efficient technologies and to the efficient use of energy in the building stock. Moreover, energy efficient renovation of buildings is supported by the strategy ‘Road to energy-efficient buildings in the Denmark of the future’, as well as subsidies and fiscal measures. However, the current shortage of suitably qualified professionals constitutes a main barrier towards achieving the energy efficiency targets.

The outlook for the construction sector mirrors the positive trajectory of the economy, with growth being predicted at 4.3% in 2018, 4.4% for 2019 and 4.5% in 2020. However, low productivity still affects the competitiveness of the industry, due to a fragmented value chain and the highly restrictive regulatory environment for construction service providers. The government policy strategy ‘Towards a stronger construction sector in Denmark’ was therefore launched to strengthen productivity and employment in the building sector.

Estonia

The number of enterprises in the broad construction sector in Estonia totalled 18,085 in 20161 (Figure 1), with the construction sub-sector (NACE F) accounting for 52.6% of the total firms, and the real estate activities for 28.8%. Overall, the number of enterprises in the broad construction sector increased by 23.6% during the period 2010-2016, mostly driven by the 44.9% growth in architectural and engineering activities, followed by 27.7% in the narrow construction and 17.2% in manufacturing.

Production in construction of buildings experienced a 69.6% increase between 2010 and 2016, followed by a 43.9% increment in construction over the same period of time. Similarly, production in civil engineering rose up by 39% in 2013, which was the highest since 2010, however it dropped by 24% in 2016 keeping a 5.6% increase since 2010 (Figure 2).

The total added value of the broad construction sector amounted to EUR 2.2 billion in 20162, with the construction sub-sector contributing to 39.1% of the total3 (EUR 863 million), followed by real estate activities (32.1% of the total), manufacturing (23.8%), and architectural and engineering activities (5.1%) (Figure 3). The share of gross value added of the broad construction sector in the GDP reached 17.2% in 2014, with real estate activities having the largest contribution (8.5%) (Figure 4).

1 Please note that this 2016 data is a nowcast - please refer to the methodology notes for further details.

2 Please note that this 2016 data is a nowcast - please refer to the methodology notes for further details.

3 Please note that the share of each sub-sector in the value added of the broad construction sector should not be compared to the shares of the Gross Value Added in the GDP, since the GDP also includes taxes and excludes subsidies.

4 No data available for subsequent years.

Finland

The number of enterprises in the broad construction sector in Finland totalled 82,470 in 20161 (Figure 1), with the construction sub-sector (NACE F) accounting for 54.1% of the total firms. Overall, the number of enterprises in the broad construction sector increased by 16.6% between 2010 and 2016 mostly driven by the 54.9% growth in real estate sub-sector companies. Conversely, the number of companies in the construction and architectural and engineering sub-sectors remained stable, whereas the manufacturing sub-sectors experienced a 12.5% decline. Production in the construction of buildings has been on the road to recovery since 2010, exceeding the 2010 level by 13.6% in 2016 (Figure 2). Similarly, production in civil engineering has been steadily increasing over the same years, surpassing its 2010 level by 17.7% in 2016.

The total added value of the broad construction sector amounted to EUR 19.1 billion in 20162, with the construction sub-sector contributing to 54.4% of the total3 (EUR 10.4 billion), followed by real estate activities (EUR 4.4 billion, i.e. 23.1% of the total), architectural and engineering activities (EUR 2.6 billion, i.e. 13.4%) and manufacturing (EUR 1.8 billion, i.e. 9.2%) (Figure 3). The share of gross value added of the broad construction sector in the GDP reached 18.3% in 2014, with real estate activities having the largest contribution (Figure 4).

1 Please note that this 2016 data is a nowcast - please refer to the methodology notes for further details.

2 Please note that this 2016 data is a nowcast - please refer to the methodology notes for further details.

3 Please note that the share of each sub-sector in the value added of the broad construction sector should not be compared to the shares of the Gross Value Added in the GDP, since the GDP also includes taxes and excludes subsidies.

France

The number of enterprises in the broad construction sector in France totalled 834,617 in 20161 (Figure 1). Companies in the narrow construction sector accounted for 60.7% of the total, followed by real estate activities (26.3%), architectural and engineering activities (11.0%) and manufacturing (2.0%). The overall number of enterprises in the broad construction sector grew by 19.6% between 2010 and 2016, driven by the 46.5% increase in the number of companies in real estate activities and the 24.0% growth in the number of enterprises in architectural and engineering activities. Production in construction declined by 12.9% over 2010-2016. In particular, production in construction of buildings dropped by 13.9% and production in civil engineering experienced an 8.7% fall over the same period (Figure 2).

In 20162, the total value added of the broad construction sector was EUR 155.4 billion (Figure 3), with the narrow construction sub-sector having the largest share (55.8%), followed by real estate activities (23.7%), architectural and engineering activities (13.7%) and manufacturing (6.8%). The share of gross value added of the broad construction sector in the GDP3 reached 18.7% in 2014, with real estate activities having the largest contribution (Figure 4). This is slightly above the EU-28 average of 16.9%.

1 Please note that this 2016 data is a nowcast - please refer to the methodology notes for further details.

2 Please note that this 2016 data is a nowcast - please refer to the methodology notes for further details.

3 Please note that the share of each sub-sector in the value added of the broad construction sector should not be compared to the shares of the Gross Value Added in the GDP, since the GDP also includes taxes and excludes subsidies.

Germany

In 2016, there were 650,813 enterprises operating in the broad construction sector in Germany, with the narrow construction sector (NACE F) accounting for 55.6% of the total (Figure 1). The number of companies in the broad construction sector has increased by 21.2% since 2010 (536,874), with the most significant increase occurring in 2013-2014 (+22.3%). Since a low point in 2010, production in construction has been fluctuating, but registered an overall growth rate of 10.4% over 2010-2016. In particular the civil engineering segment recorded a strong performance over this period (+18.6%), while growth in the construction of buildings stood at 8.5% (Figure 2).

In 2016, the total value added of the broad construction sector was EUR 233.6 billion (Figure 3), with the narrow construction sub-sector having the largest share (43.7%, i.e. EUR 102.2 billion). It was followed by real estate activities with a share of 29.8% (EUR 69.6 billion), architectural and engineering activities with 16.6% (EUR 38.7 billion), and manufacturing with 9.9% (EUR 23.0 billion). In terms of gross value added as a share of GDP1, real estate had the highest share (9.8%) in 2016, followed by narrow construction (4.3%) (Figure 4).

1 Please note that the share of each sub-sector in the value added of the broad construction sector should not be compared to the shares of the Gross Value Added in the GDP, since the GDP also includes taxes and excludes subsidies.

Greece

The Greek construction sector is showing some signs of relative improvement in recent years, after being severely hit by the economic crisis. However, the sector faces still a long way before fully recovering. The number of enterprises operating in the broad construction sector is 17.0% lower than in 2010 and the production in the construction of buildings dropped by 62.4% between 2010 and 2017.

Investment in the broad construction sector fell by 55.2% between 2010 and 2017 reflecting the severe economic downturn. Investment in dwellings dropped by 89.9% from 2010 to 2017, highlighting the collapse of the residential market. Investment in non-residential construction and civil engineering fared comparatively better, decreasing by 11.2% from 2010 to 2017.

The housing market has been significantly impacted by the crisis with demand for housing and house prices plummeting by 37.9% in Athens and 31.9% in other cities except Thessaloniki. These can be seen as consequences of higher unemployment (from 12.7% in 2010 to 21.5% in 2017) and the negative impact on purchasing power of certain austerity measures, such as higher VAT and real estate taxes. The absence of policy schemes in Greece fostering access to housing as well as the uncertain regulatory and political context further exacerbate the problem. At the same time, with the housing supply surpassing the demand, there are limited incentives for the construction of new dwellings.

Investments in infrastructures are projected to increase over the coming years, with a total of EUR 21.4 billion to be invested until 2022. 25% of these infrastructure projects, with a value of EUR 2.9 billion, were to be delivered in 2017. These investments are supported by the government’s increased focus on strengthening the tourism sector, and by the Greek Privatization Program, which attracts significant private sector investments.

The construction of non-residential construction was negatively impacted by the crisis. The limited confidence in the Greek economy coupled with the political uncertainties impede private investments and hence the development of the sector. With the end of the EU bailout and the positive GDP growth prospects (+1.9% in 2018 and 2.3% in 2019), confidence in the country’s economy may slowly recover.

Greece is lagging behind in eco-innovation and sustainable construction with decreasing spending on business enterprise R&D expenditure by over 50% between 2011 and 2013. Patent applications related to construction have also fallen from 11 in 2010 down to only 5 in 2017. Even though the government is taking action to strengthen the innovation capacity of the construction sector through a National Strategy, few large-scale programmes are put in place in order to foster eco-innovation and sustainable construction. The use of Building Information Modelling is also limited in Greece.

The outlook for the construction industry is hence positive but fragile, relying on European and national public sector investments. Over the forecast period of 2016-2020, the industry is expected to be supported by gradual improvements in business confidence, as well as subsequent public and private sector investments in transport, residential and commercial construction projects.

Hungary

The number of enterprises in the broad construction sector in Hungary amounted to 118,595 in 20161 (Figure 1). Companies in the narrow construction sector accounted for 47.3% of the total, followed by real estate activities (27.6%), architectural and engineering activities (19.7%) and manufacturing (5.4%). The overall number of enterprises in the broad construction sector experienced a 8.4% decline over 2010-2016, mainly led by the 16.8% and 12.2% drops in the number of narrow construction and manufacturing companies.

Production in construction recorded a 11.5% decrease over 2010-2016, dropping by 6.5% in 2012 relative to 2010 and despite an increase of 9.0% noted in 2015, dropped again by 18.8% in 2016, below the 2010 value (Figure 2). Similarly, production in construction of buildings and civil engineering dropped by 6.8% and 17.5% over 2010-2016, respectively, being below the 2010 level.

In 20162, the total value added of the broad construction sector was EUR 6.1 billion (Figure 3), with the narrow construction sub-sector having the largest share, followed by real estate activities, manufacturing and architectural and engineering activities.

The share of gross value added of the broad construction sector in the GDP3 reached 11.6% in 2015, with real estate activities having the largest contribution (Figure 4).

1 Please note that this 2016 data is a nowcast - please refer to the methodology notes for further details.

2 Please note that this 2016 data is a nowcast - please refer to the methodology notes for further details.

3 Please note that the share of each sub-sector in the value added of the broad construction sector should not be compared to the shares of the Gross Value Added in the GDP, since the GDP also includes taxes and excludes subsidies.

Ireland

The number of enterprises in the broad construction sector in Ireland was estimated at 78,833 in 20161 (Figure 1). Companies in the narrow construction sector represented 69% of the total, followed by real estate activities (17.6%), architectural and engineering activities (10.7%) and manufacturing (2.8%). The overall number of enterprises in the broad construction sector in 2016 was 6.7% above the 2010 level, with the real estate activities sub-sector experiencing the highest increase (21.8%), followed by architectural and engineering activities (8.3%). Companies in the manufacturing and construction sub-sectors saw a 2.5% and 3.4% increase in numbers, respectively.

Production in construction of buildings dropped drastically between 2010 and 2012 (-23.2.3%) (Figure 2), but started to recover after 2013, increasing with 38.7% from the 2010 level by 2016. Similarly, production in civil engineering fell by 33% in2011 and despite a steady increase over 2012-2015, it was still 1.4% below the 2010 level by 2016.

In 2016, the total value added of the broad construction sector was estimated at EUR 10.6 billion (Figure 3), with the construction sub-sector having the largest share (60.8%, i.e. EUR 6.5 billion), followed by architectural and engineering activities (16%, i.e. EUR 1.7 billion), real estate activities (15.6%, i.e. EUR 1.6 billion) and manufacturing (7.5%, EUR 800 million). The share of gross value added of narrow construction and real estate activities2 in the GDP3 reached 2.6% and 5.7% in 2016, respectively (Figure 4).

1 Please note that this 2016 data is a nowcast - please refer to the methodology notes for further details.

2 No data available for manufacturing and architectural and engineering activities.

3 Please note that the share of each sub-sector in the value added of the broad construction sector should not be compared to the shares of the Gross Value Added in the GDP, since the GDP also includes taxes and excludes subsidies.

Italy

The Italian construction sector is a vital part of the national economy, with its gross value added accounting for 18.8% of GDP.

In 2017, the sector experienced a modest growth, as reflected by the increase of the total added value or the total turnover of the broad construction sector. However the sector still faces numerous challenges. Italy has experienced a 9.8% drop in the number of construction companies between 2010 and 2017, with sharp drops in terms of the profitability of the sector (the turnover decreased by -19.3% in the same period). Likewise, production decreased by 32.2%, and the number of workers by 23.3%.

Two key issues currently hinders the sustainable development of the Italian construction industry. First, access to finance has been excessively limited, with outstanding loans to the construction sector declining by 21.8% between 2010 and 2016 (from EUR 170.6 billion to EUR 133.4 billion). New loans to construction businesses also decreased by 68% in value between 2007 and 2016. Second, late payment remains a key issue in the sector, exacerbating the issue of liquidity in the sector. 70% of companies reported delays in payment from Public Administrations in 2017, having to wait an average of 156 days before being paid. In addition, the Italian construction sector reports one of the worst payment practices in the general economy, with only 5.7% of payments being settled by due date in 2016. As a consequence, the number of failures in construction is at historically high levels. However, the number of bankruptcies has declined by 8.6% in comparison to 2016.

Although residential building permits and the house price index dropped by 54.0% and 14.0% over 2010-2016, respectively the housing market has been picking up since 2014, with the number of residential sale transactions increasing by 16.3%, from 444,636 in 2015 to 517,164 in 2016. This is spurred by low interest rates (2.4% compared to 3.6% in 2010) and improved mortgage lending to households. To offset the 15.1% drop in construction investment over 2010-2016, investment initiatives have been set up, reversing the declining trend since 2014. The Budget Law 2017 introduces important measures to stimulate public and private infrastructural investment. In particular it focuses on seismic safety measures (up to 85% deduction) and energy efficiency. Moreover, the Investment and Infrastructure Development has a budget of €47 billion of euros for the period 2017-2032. EU funds are also crucial, with EUR 3.4 billion from the European Regional Development Fund (ERDF) allocated for network infrastructures in transport and energy alone during 2014 -2020.

There has also been an improvement in innovation and sustainable construction among companies, with increasing R&D expenditure in some sub-sectors.

The country’s main innovative strengths lie in International scientific co-publications, and SMEs innovating in-house. Moreover the use of BIM technologies is growing in the sector, and they will be mandatory for all projects by 2022. The market for energy efficient renovation is also booming, spurred by the Renovation Bonus and Eco Bonus, offering tax deductions of up to 65% on eligible renovation interventions. Italian construction companies also fare remarkably well in foreign markets, both within the EU and internationally (Latin America, Africa and the Middle East).

After a period of sustained decline, there will be a modest recovery in the construction sector in 2018, mainly led by investment in infrastructure and by EU funds. However, the workers employed in construction will continue to decrease, and the public administrations late payment and public procurement practices may discourage private investment in the future.

Latvia

The number of enterprises in the broad construction sector in Latvia totalled 25,266 in 20161 (Figure 1), with the real estate sub-sector accounting for 46.1% of the total and narrow construction for 37.8%. Overall, the number of enterprises in the broad construction sector increased by 17.7% during the 2010-2016 period, led by architectural and engineering activities (+52.7%) and manufacturing (+46.2%).

Production in construction increased by 40.0% over 2010-2014, declining over the subsequent years but still being 20.9% higher than 2010 in 2016 (Figure 2). Namely, production in construction of buildings peaked in 2014, being 79.3% higher than in 2010, but subsequently declined, though being 64.5% above the 2010 level in 2016. Conversely, production in civil engineering dropped after 2013, being 11.6% lower than the 2010 level in 2016.

The total added value of the broad construction sector amounted to EUR 1.9 billion in 20162, with the construction sub-sector contributing to 37.8% of the total3 (EUR 704.5 million), followed by real estate activities, manufacturing and architectural and engineering activities (Figure 3). The share of gross value added of the broad construction sector in the GDP reached 20.3% in 20144, with real estate activities having the largest contribution (11.7%) (Figure 4).

1 Please note that this 2016 data is a nowcast - please refer to the methodology notes for further details.

2 Please note that this 2016 data is a nowcast - please refer to the methodology notes for further details.

3 Please note that the share of each sub-sector in the value added of the broad construction sector should not be compared to the shares of the Gross Value Added in the GDP, since the GDP also includes taxes and excludes subsidies.

4 No data available for subsequent years.

Lithuania

The number of enterprises in the broad construction sector in Lithuania totalled 44,820 in 20161 (Figure 1). Specifically, 58.4% of these belonged to the narrow construction sector, 22.9% were dedicated to real estate activities, 9.6% to manufacturing and 9.1% to architectural and engineering activities. The overall number of enterprises in the broad construction sector grew substantially by 82.8% between 2010 and 2016. The number of companies in the narrow construction doubled with an increase rate of 114.6% between 2010 and 2016, yet companies in real estate followed the same trend but grew less substantially by 52.7%. The overall production in the construction sector increased by 29.0% between 2010 and 2016, followed by considerable growth of 71.0% in the production of buildings. Production in civil engineering works rose by 33.0% in 2014, reaching the highest point and dropped by 28.0% in 2016 compared to the 2014 levels (Figure 2).

In 20162, the total value added of the broad construction sector was EUR 2.4 billion (Figure 3), with the narrow construction sub-sector having the largest share (51.8.6%, i.e. EUR 1.2 billion). It was followed by real estate activities with a share of 26.2%, manufacturing with 14.8% and architectural and engineering activities with 7.3%. The share of gross value added of the broad construction sector in the GDP3 reached 14.8% in 20144, slightly below the EU-28 average of 16.9% with narrow construction having the highest share (Figure 4).

1 Please note that this 2016 data is a nowcast - please refer to the methodology notes for further details.

2 Please note that this 2016 data is a nowcast - please refer to the methodology notes for further details.

3 Please note that the share of each sub-sector in the value added of the broad construction sector should not be compared to the shares of the Gross Value Added in the GDP, since the GDP also includes taxes and excludes subsidies.

4 No data available for subsequent years.

Luxembourg

The number of enterprises in the broad construction sector in Luxembourg totalled 8,044 in 20161 (Figure 1), with the construction sub-sector (NACE F) accounting for 45.8% of the total firms, and the real estate activities for 36.0%, which represents 3,686 and 2,896 enterprises, respectively. Overall, the number of enterprises in the broad construction sector increased by 11.0% during the period 2010-2016. This increase was led by the growth of architectural and engineering activities (+15.8%), followed by construction (+14.5%) and real estate companies (+5.4%). On the other hand, the number of companies focused on manufacturing activities decreased by 5.6%, from 90 companies in 2010 to 85 companies in 2016.

Production in construction peaked in 2011 before dropping by 7.8% between 2011 and 2013. Since 2013, production recovered with a year-on-year improvement of 3.6% in 2014, yet being still below the pre-crisis level (Figure 2). Between 2014 and 2016, production continued to increase by 2.1%. The real estate sector was less affected by the crisis, contributing to the development of the construction sector2.

The total value added of the broad construction sector amounted EUR 3.9 billion in 20163, with the construction sub-sector contributing to 60.2% of the total4 (EUR 2.4 billion), followed by real estate activities (23.2% of the total), architectural and engineering activities (12.8%) and manufacturing (3.8%) (Figure 3). The share of gross value added of the broad construction sector in the GDP reached 13.3% in 2014, with the real estate sub-sector having the largest contribution, followed by narrow construction, architectural and engineering activities, and last manufacturing, as presented in Figure 4 below. This is below the EU28 average standing at 16.9%.

1 Please note that this 2016 data is a nowcast - please refer to the methodology notes for further details.

2Saisir les opportunités dans la construction au Grand-Duché : http://www.frontalierslorraine.eu/uploads/publications/2014-07-20_Construction-v4.pdf

3 Please note that this 2016 data is a nowcast - please refer to the methodology notes for further details.

4 Please note that the share of each sub-sector in the value added of the broad construction sector should not be compared to the shares of the Gross Value Added in the GDP, since the GDP also includes taxes and excludes subsidies.

Malta

The number of enterprises in the broad construction sector in Malta totalled 5,795 in 20161 (Figure 1), with the construction sub-sector accounting for 61% of the total. Overall, the number of companies in the broad construction sector declined by 5.2% since 2011 (5,510).

Production in construction2 rose continuously between 2010 and 2015, peaking in 2015 due to the need to exhaust EU funds (+28.5%). It subsequently declined by 3.8% in 2016 as EU funded projects came to completion, though still being 23.6% higher than the 2010 level (Figure 2).

The total added value3 of the broad construction sector amounted to EUR 524.4 million in 20164, with the construction sub-sector accounting for 59.3% of the total (Figure 3). The share of gross value added of the broad construction sector in the GDP reached 8.1%5 in 2016, with real estate activities having the largest contribution (Figure 4).

1 This total only includes Construction and Real estate activities, since no data is available for Manufacturing and Architectural and engineering activities after 2010. This total cannot therefore be compared to the 2010 total, which also includes Manufacturing and Architectural and engineering activities.

2 The data breakdown for construction of buildings and civil engineering is not available.

3 Please note that the share of each sub-sector in the value added of the broad construction sector should not be compared to the shares of the Gross Value Added in the GDP, since the GDP also includes taxes and excludes subsidies.

4 Please note that this total only includes Construction and Real estate activities, since no data is available for Manufacturing and Architectural and engineering activities.

5 This total only includes Construction and Real estate activities, since no data is available for Manufacturing and Architectural and engineering activities. It therefore cannot be compared to the EU28 average of 16.9%.

Netherlands

The number of enterprises in the broad construction sector in the Netherlands totalled 246,977 in 20161 (Figure 1), with the construction sub-sector (NACE F) accounting for 68.8% of the total firms. Overall, the number of enterprises in the broad construction sector increased by 28.9% between 2010 and 2016, mostly driven by the 48.4% growth in architectural and engineering companies, followed by 33.1% in construction and 14.5% in manufacturing. According to Bouwend Nederland (Building Netherlands), this growth is mostly attributable to the increase in one-person companies following the crisis, which make up the majority of companies in the industry. The volume index of production in construction2 experienced an initial 12.1% drop between 2010 and 2013 due to the crisis, reaching a bottom low (Figure 2). However, it increased by 21.7% over 2013-2016 and overall increment of 7% is recorded over the period of 2010-2016.

The total added value of the broad construction sector amounted to EUR 54.7 billion in 20163, with the construction sub-sector contributing to 49.0% of the total4 (EUR 26.8 billion), followed by 28.6% of real estate activities, 15.0% of architectural and engineering activities and 7.4% of manufacturing (Figure 3). The share of gross value added of the broad construction sector in the GDP reached 11.4% in 20145, slightly below the EU-28 average of 16.9%, with real estate activities having the largest contribution (Figure 4).

1 Please note that this 2016 data is a nowcast - please refer to the methodology notes for further details.

2 No data is available for the breakdown into production in construction of buildings and production in civil engineering.

3 Please note that this 2016 data is a nowcast - please refer to the methodology notes for further details.

4 Please note that the share of each sub-sector in the value added of the broad construction sector should not be compared to the shares of the Gross Value Added in the GDP, since the GDP also includes taxes and excludes subsidies.

5 No data available for subsequent years.

Poland

The Polish construction sector is composed mostly by small companies and several large players, totalling 453,026 firms in 2017.

Production in construction fluctuated between 2010 and 2016, and overall increased by 9.1% over 2010-2017 after a slight decline in 2016.

This growth was mainly driven by a 24.0% increase of production in the construction of buildings segment between 2010 and 2017. Both the production of civil engineering segment and narrow construction segments have increased again since 2016. While the civil engineering segment has dropped by 14.6% in the 2010-2017 period, the narrow construction sector remained stable. In parallel, employment fell at 5% below the 2010 level, reaching 1.3 million people employed in the broad construction sector in Poland.

The housing market has continuously been growing at a high pace (as indicated by the number of new flats built in 2017, which grew by 9.1% in comparison to 2016), with house price increasing by 2.1%.

The demand for housing is fostered by rising incomes of households (+24.6% between 2010 and 2015), low interest rates, and favourable policy schemes, such as the housing subsidies called ‘Apartments for the Young’.

That said, this growth could be slowed down in the future with the end of the government support program in 2018 and the expected heightened restriction on mortgage loan availability. The increase of housing demand may also have resulted from the changing structure of the sold flats. The number of relatively cheaper flats, purchased under the "Flat for the Young" scheme has diminished, while the number of more expensive buy-to-let flats has increased (Residential Market in Poland in 2017 Q2, REAS). This reflects a possibility of mounting shortages of housing supply, even though developers have increased the supply of flats. This is reflected by the growing number of building permits issued and dwellings under construction, which grew by 18.7% between 2016 and 2017.

The number of building permits grew by 18.7% in 2017 compared to 2016, while the number of completed dwellings reached 178,258 in 2017 (against 162,727 in 2016), indicating a 9.1% increase. Likewise, the EU funds allowed Poland to finance large infrastructure projects, including in the transport and energy sector.

The EU budget for the period 2014-2020 is expected to have delivered EUR 28 billion in support to infrastructure and transport.

On the other hand, construction costs, including materials, but also workers’ wages, have significantly increased. Hence construction companies’ income have largely suffered, as witnessed by the increasing number of bankruptcies. More generally, the issues of late payment and workers shortage already have significant impact on the sector’s growth, preventing companies to develop further. These issues will need to be tackled to ensure the development of the sector, which is expected to grow substantially, by 9.9% in 2018 and 10.0% in 2019.

This growth also reflects the growth of the Polish economy, which is predicted to grow by 4.3% and 3.7% annually in 2018 and 2019, respectively, due to social transfers, low interest rates and the spending of EU funds.

Portugal

The Portuguese construction sector is recovering, driven by the real estate and to a lesser extent public investments. The number of companies in the broad construction sector dropped to 160,544 in 2017, 11.3% below the 2010 level, but 11.4% more than in 2014, which initiated a continuous growth including until 2017. Similarly, the production of the broad construction sector dropped by 47.2% between 2010-2017, but 2017 marked the first year of an upward trend. The total turnover of the Portuguese broad construction sector in 2017 amounted to EUR 33.2 billion, 34.9% lower than 2010 (EUR 51.0 billion) but increasing since 2014 (+9.0%).

The residential construction, which suffered considerably from the crisis, started recovering, with 14,200 new dwellings completed in 2017, (far from the 114,000 built in 2001). In addition, renovation investments have also increased, and are expected to grow in the coming years (+9.7% in 2018). This growth is partly driven by external demand and tourism. Consequently, housing availability and accessibility have emerged as an important issue, with 58% of young people aged 18-34 still living with their parents and only 2% of the housing stock are rented through social/supported leases. To address these issues, in 2018 the government approved a set of key measures for the New Generation Housing Policies, which target mainly the issue of access to housing.

In addition, the government tackled declining investment in infrastructure, with the 2018 State budget, which grants a budget increase of +20.1% (about EUR 645 million) to the Ministry of Planning and Infrastructures. These developments thus offer bright prospects to the construction sector.

The construction sector also faces challenges. Skills and labour shortage particularly affect the development of the sector, which is lacking about 80,000 workers, including highly qualified professionals. Between 350 and 400 civil engineers would be needed every year, compared to the current numbers of about 150 every two years. In addition, the market structure of the sector with 88.9% of companies being MSMEs may also limit potential investments of the construction sector in innovation and more generally equipment that could generate productivity and profitability increases. Finally, the issue of late payment, coupled with the limited access to finance (both issues affecting disproportionally MSMEs) limit the liquidity of the sector. Both are factors limiting the growth of the MSMEs segment in the construction sector.

Addressing these issues will be of prime importance to foster the sustainable growth of the sector, and realise its growth potential, and the underlying positive social impacts.

Romania

The number of enterprises in the broad construction sector in Romania totalled 89,943 in 20161 (Figure 1). Companies in the narrow construction sector accounted for 58.9% of the total, followed by architectural and engineering activities (16.9%), real estate activities (16.0%) and manufacturing (8.2%). The overall number of enterprises in the broad construction sector increased by 7.6% between 2010 and 2016. After a drop in 2011 from 83,559 to 74,673 enterprises, this number increased continuously driven by the 16.8% growth in companies in architectural and engineering activities, the 7.3% growth in companies in the narrow construction sector and the 6.1% growth in companies in real estate activities. Production in construction increased by 1.8% over 2010-2016. Specifically, production in construction of buildings increased by 21.4%, while production in civil engineering experienced a 9.7% fall over the same period (Figure 2).

In 20162, the total value added of the broad construction sector was EUR 9.4 billion (Figure 3). The construction sub-sector had the largest share (54.4%, i.e. EUR 5.1 billion), followed by real estate activities (17.7%, i.e. EUR 1.7 billion), manufacturing (15.0%, i.e. EUR 1.4 billion) and architectural and engineering activities (12.9%, i.e. EUR 1.2 billion).

The share of gross value added of the broad construction sector in the GDP3 reached 17.2% in 2014, with real estate activities having the largest contribution (8.1%) (Figure 4). This is in line with EU-28 average which stands at 16.9%.

1 Please note that this 2016 data is a nowcast - please refer to the methodology notes for further details.

2 Please note that this 2016 data is a nowcast - please refer to the methodology notes for further details.

3 Please note that the share of each sub-sector in the value added of the broad construction sector should not be compared to the shares of the Gross Value Added in the GDP, since the GDP also includes taxes and excludes subsidies.

Slovenia

Slovenia’s economy has recovered from the crisis and is now growing faster than the EU average. The country’s growth is driven by net exports, private consumption and investment. This positive economic growth also mirrors in the construction sector driven by domestic demand. Despite significant decline related to the transition to the new EU financial perspective in 2016, the government investment accelerated in 2017 and is forecast to continue in coming years.

Slovenia's construction industry is back in positive growth territory, with 2018 growth expected to be high, notably due to a recuperating residential and non-residential buildings sector.

In 2017, there were 34,445 enterprises in the broad construction sector in Slovenia, with the construction sub-sector accounting for 62.4% of the total firms.

Production in construction of buildings dropped continuously between 2010 and 2013 (-60.3%), subsequently stabilising and picking up in 2017 but still being 48.3% below the 2010 level in 2017. The total added value of the broad construction sector amounted to EUR 2.8 billion in 2017, with the construction sub-sector contributing to 52.1% of the total (EUR 1.5 billion), followed by manufacturing, architectural and engineering activities and real estate.

After a 15.4% drop in the house price index over 2010-2014, increased mortgage lending to households and low mortgage interest rates are driving the recovery of the housing market. Indeed, after dropping by 15.4% over 2010-2014, the house price index for total dwellings grew by 12.5% over 2014-2017, though still being 5.7% lower than 2010. Residential construction was also badly affected by the crisis, though it is now picking up. Indeed, the number of dwellings under construction fell from 16,002 in 2010 to 9,176 in 2016, although this is 4.4% higher than 2015. The number of dwelling completions and building permits also followed the same trend.

To improve access to housing, the National Housing Policy 2015-2025 aims to support vulnerable groups by tackling key challenges such as the affordability of rental housing and the short supply of social housing.

Total investment in construction dropped by 27% over 2010-2013 and, although it recovered and stabilised in 2014 and 2015, it fell again in 2016. Total investment in construction recorded a slight increase, being 25.9% lower than the 2010 levels. The government launched the Transport Development Strategy in 2015, under which an annual amount of EUR 200 million has been allocated for the construction and renovation of railways, and another EUR 200 million for the upgrade of state roads. Priority projects include the second track of the Divača–Koper railway line. EU funds under the Connecting Europe Facility (CEF) and European structural investments funds (ESIF) are also a crucial support to transport infrastructure.

Slovenia also introduced a number of measures to support energy-efficient construction, such as the EUR 76.5 million programme Energy Renovation of State and Municipal Owned Buildings and the ECO Fund, which will provide EUR 30 million worth of grants for energy efficiency and renewable energy investments in residential buildings in 2017. However, the construction industry is facing a shortage of skills in a number of professions, such as blue collar workers and civil engineers. Specific initiatives were introduced to strengthen skills in the sector, such as scholarships for shortage occupations and the Building Green Skills.

The Spatial Planning Act and the Construction Act are currently in the in process of being revised to reduce the administrative burden related to spatial planning and obtaining building permits. Such amendments are expected to minimise investment risks and attract foreign investors. Moreover, owing to the improving economic context and the pipeline of planned EU-funded infrastructure projects, the construction sector is expected to grow by 10.1% in 2018 and 16.1% in 2019.

Slovakia

The Slovak broad construction sector is composed of mostly small and medium sized companies and few large players, totalling 119,704 enterprises in 2017.

Number if enterprises in the narrow construction fluctuated between 2010 and 2017, decreasing by 7.0% over 2010-2017.

This decline in the amount of enterprises was mainly driven by a 27.6% decrease of production of other specialised construction activities segment between 2010 and 2017, while the production of development of building projects segment and construction of building segments have importantly increased since 2010. Overall, the number of companies in the real estate sub-sector grew by 89.1% between 2010 and 2017 while the number of enterprises in the manufacturing segment dropped by 16.3% over the same period.

In parallel, employment in construction decreased by 8.1% between 2010 and 2017 reaching 236,730 workers in the broad construction sector in Slovakia.

The construction confidence in Slovakia is growing since 2013, setting the pre-conditions for the investment growth in the sector. In line with this, Slovakia showed a strong growth of investment per worker in the construction field (+29.2%) in 2010-2015.

The residential construction market in Slovakia is growing notably due to low interest rates and rising incomes. In 2016, the average interest rate of new housing loans was about 2.0% . At the same time, the prices of new dwelling increased by 6.6% between 2016 and 2017, supported by an increasing demand.

The demand for housing is further boosted by rising households’ incomes (+6.6% between 2016 and 2017) and low interest rates.

Although the number of dwellings completed in 2017 increased by 8.1% compared with 2016 (reaching 16,946 dwellings), the number of new building permits is on the decline (-10.5%), indicating a potential risk of the slowdown in the residential construction.

Likewise, the EU funds allowed Slovakia to finance large infrastructure projects, including in the transport and energy sector. The European Structural and Investment Funds (ESIF) allocation for Slovakia for transport and key network infrastructures amounts to EUR 3.5 billion for the 2014-2020 programming period.

The outline for the Slovak construction sector remains positive for the medium-term perspective.

Strong growth is forecasted for 2019, with the expected increase of more than 13%.

This growth will be fuelled by the large infrastructure projects. Significant investments are foreseen in the development of the highway network (D1, D4-R7) in 2016-2020. The D4 Motorway and R7 Expressway Project oversees the construction of the southern part of Bratislava Bypass and part of the southern expressway network, linking the west and the east part of Slovakia.

The sector is forecasted to benefit from the growth in the industrial and commercial construction. The expansion of activities of large automotive manufacturers like Jaguar Land Rover and Plastic Omnium will result in construction of new production facilities in Slovakia.

Finally, the growth in the residential sector in 2018-2019 will be supported by the strong government presence in a form of various housing policies as well low mortgage rates.

Spain

The number of enterprises in the Spanish broad construction sector amounted to 653,117 in 20161 (Figure 1). Companies in the narrow construction sector accounted for 60.0% of the total number of enterprises, followed by real estate activities (21.1%), architectural and engineering activities (13.8%) and manufacturing (5.2%). Spain experienced a sharp drop in the number of construction enterprises between 2010 and 2013 (-12.4%), but steady recovery in the following years (+16.9%) led to the 2.4% of increase in 2016 compared with 2010 values. The biggest increase since 2013 has been reported in narrow construction (22.4%), followed by real estate activities (18.9%), whereas the number of companies in the manufacturing sub-sector, and architectural and engineering activities only increased by 0.1% and 1.1% respectively.

Production in construction has been following a similar declining trend in 2010-2012 with the following partial recovery until 2016. More specifically, 2016 values compared to 2010’s are 3.2% below for construction, with the production in construction of buildings practically at the same level (-0.1%). The volume of production in civil engineering remains the lowest, being 17.3% under 2010’s index of production in 2016 (Figure 2). Despite the upward trend registered since 2013, (+16,9% increase since 2013).

In 2016, the total value added2 of the broad construction sector amounted EUR 66.5 billion (Figure 3), with narrow construction having the largest share (53.6%). The total value added of the broad construction sector has been on decline until 2014 with a slow recovery till 2016, however still being 30,7% lower than in 2010. The share of gross value added of the broad construction sector in the GDP3 decreased by 12,6% between 2010-20154, reaching in 2015 to 17.1%5, with real estate activities having the largest contribution (9.9%) (Figure 4).

1 Please note that this 2016 data is a nowcast - please refer to the methodology notes for further details.

2 Please note that the share of each sub-sector in the value added of the broad construction sector should not be compared to the shares of the Gross Value Added in the GDP, since the GDP also includes taxes and excludes subsidies.

3 Please note that the share of each sub-sector in the value added of the broad construction sector should not be compared to the shares of the Gross Value Added in the GDP, since the GDP also includes taxes and excludes subsidies.

4 No data available for subsequent years.

5 No data available for subsequent years.

Sweden

The number of enterprises in the broad construction sector in Sweden totalled 213,434 in 2016 (Figure 1). Companies in the narrow construction sector accounted for 49.8% of the total, followed by real estate activities (28.7%), architectural and engineering activities (18.8%) and manufacturing (2.7%). The overall number of enterprises in the broad construction sector experienced a 21.4% increase over 2010-2016, with growth in all sub-sectors at approximately 20%, with the exception of manufacturing, in which the number of companies declined by 7.5%. Production in construction and its subsectors was in decline between 2011 and 2013, but has been recovering since and in 2016 was 16.3% above its 2010 level. However, while production in the construction of building increased by 19.2% in that period, production in civil engineering remained below its 2010 value by 17.5%. (Figure 2).

In 20161, the total value added of the broad construction sector was EUR 2.4 billion (Figure 3), with the narrow construction sub-sector having the largest share (51.8.6%, i.e. EUR 1.2 billion). It was followed by real estate activities with a share of 26.2%, manufacturing with 14.8% and architectural and engineering activities with 7.3%. The share of gross value added of the broad construction sector in the GDP2 reached 14.8% in 20143, slightly below the EU-28 average of 16.9% with narrow construction having the highest share (Figure 4).

1 Please note that this 2016 data is a nowcast - please refer to the methodology notes for further details.

2 Please note that the share of each sub-sector in the value added of the broad construction sector should not be compared to the shares of the Gross Value Added in the GDP, since the GDP also includes taxes and excludes subsidies.

3 No data available for subsequent years.

United Kingdom

The number of enterprises in the broad construction sector in the United Kingdom totalled 508,226 in 2017. The number of enterprises in the broad construction sector increased by 10.7% over 2010-2017, mainly driven by the 32.1% increase in the number of architectural and engineering companies. Despite dropping in 2012, product​ion in the broad construction sector has been increasing ever since, being 20.0% above the 2010 level in 2017. In turn, in 2017 , the broad construction sector employed 2,561,175 people, a 4.4% increase compared to 2010 (2,452,168).

In parallel, the UK housing market in facing two key issues. House price have increased significantly in recent years (+24.3% between 2010 and 2017), outnumbering pre-crisis level. House price vary per regions with the highest price increase recorded in East Anglia (+5.0%), followed by South West (4.4%), North West (4.1%) and East Midlands (4.1%). This growth of house price is also affected by the housing shortage currently faced by the UK. In fact, to address this issue, the UK would need to build an additional 232,000 to 300,000 new units per year. This led the government to establish plans to deliver 400,000 affordable housing units by 2020-21, 100,000 of which financed through a new GBP 2.3 billion (EUR 2.7 billion) Housing Infrastructure Fund.

The government’s objectives and priorities for future infrastructure investment are defined in the new National Infrastructure Delivery Plan 2016-2021. The latter includes a GBP 500 million (EUR 586 million) infrastructure pipeline. In addition, The new GBP 23 billion (EUR 26.8 billion) National Productivity Investment Fund will also finance investments in infrastructure, housing and research and development (R&D) over 2017-2022. These new policies will play a key role in supporting the growth of the construction sector in the UK.

The UK construction also faces major challenges, relating to labour and skills shortage. Post-Brexit could lead to a loss of 215,000 workers.

This would negatively affect the ability to deliver the planned housing units and ambitious infrastructural projects, and entail increases in construction costs when leaving the EU Single Market. Growth projections for the sector are low, forecast at 1.7% for 2018, 2.2% for 2019 and 2.5% for 2020, with residential buildings and infrastructure projects being core drivers of the sector’s growth.

Finally, the UK is a key player in sustainable construction and energy efficiency, especially in the context of residential building renovation. The Government developed several policies in this field, including the Energy Company Obligation (ECO) scheme. This measure aims to promote solid wall insulation, cavity wall insulation and replacement of heating systems for vulnerable households, by placing obligations on energy suppliers.

Analytical reports

Analytical reports are documents providing the EU with a wide analysis of the socio-economic and environmental performance of the construction sector and recommendations for possible strategies to increase the sector's competitiveness.

Trend papers

Trend papers are analytical reports that describe specific aspects of the main trends in the construction sector. The reports also contain relevant good practice examples from a policy and industry perspective.

Policy measure fact sheets

ECSO identifies and analyses specific policy measures that are being implemented in each EU country to stimulate construction sector employment, growth and opportunities. These are shown in the policy measure fact sheets, organised by thematic objective below.

Thematic objective 1

Belgium

Bulgaria

Croatia

Cyprus

Czech Republic

Denmark

Estonia

France

Germany

Greece

Hungary

Ireland

Italy

Netherlands

Poland

Portugal

Romania

Slovakia

Slovenia

Spain

Sweden

United Kingdom

Thematic objective 3

Austria

Belgium

Bulgaria

Croatia

Cyprus

Czech Republic

Denmark

Finland

France

Germany

Greece

Hungary

Italy

Lithuania

Luxembourg

Malta

Netherlands

Poland

Portugal

Romania

Slovakia

Slovenia

Spain

Sweden

United Kingdom

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