Archive:Construction statistics - NACE Rev. 2

Data from April 2012, most recent data: Further Eurostat information, Main tables and Database

This article presents information relating to the construction sector in the European Union (EU), as covered by NACE Rev. 2 Section F. The NACE classification distinguishes between, on the one hand, two general types of construction activity, construction of buildings (Division 41) and civil engineering (Division 42), and a collection of specialised activities (Division 43) such as site preparation, installation activities, and completion and finishing activities. Not included, however, are some related technical activities such as architectural services (see the article on real estate services for more details).

The financial and economic crisis had a major impact on the construction sector in nearly all EU Member States. Output and employment fell sharply in many of the Member States, particularly in Spain and the Baltic Member States. Between February 2008 and December 2010 the EU-27’s seasonally adjusted production index for construction fell by more than one fifth (-21.4 %) underlining both the length and severity of the downturn in this activity. During the first half of 2011 there were modest signs of a recovery although this pattern was reversed in the second half of the year, such that by the start of 2012, the level of output for construction had almost returned to its lowest level during the financial and economic crisis (at the end of 2010). The considerable changes in market conditions for the construction sector since 2008 should be borne in mind when considering the data presented in this article which relates to the situation in 2009.

Table 1: Key indicators, construction (NACE Section F), EU-27, 2009 - Source: Eurostat (sbs_na_con_r2)

Figure 1: Sectoral breakdown of construction (NACE Section F), EU-27, 2009 (1)
(% share of sectoral total) - Source: Eurostat (sbs_na_con_r2)

Table 2a: Sectoral breakdown of key indicators, construction (NACE Section F), EU-27, 2009 - Source: Eurostat (sbs_na_con_r2)

Table 2b: Sectoral breakdown of key indicators, construction (NACE Section F), EU-27, 2009 - Source: Eurostat (sbs_na_con_r2)

Figure 2: Relative importance of construction (NACE Section F), 2009 (1)
(% share of value added and employment in the non-financial business economy total) - Source: Eurostat (sbs_na_con_r2)

Figure 3: Concentration of value added and employment, construction (NACE Section F), 2009 (1)
(cumulative share of the five principal Member States as a % of the EU-27 total) - Source: Eurostat (sbs_na_con_r2)

Table 3: Largest and most specialised Member States in construction (NACE Section F), 2009 (1) - Source: Eurostat (sbs_na_con_r2)

Table 4a: Key indicators, construction (NACE Section F), 2009 - Source: Eurostat (sbs_na_con_r2)

Table 4b: Key indicators, construction (NACE Section F), 2009 - Source: Eurostat (sbs_na_con_r2)

Main statistical findings

Structural profile

The EU-27’s construction sector (Section F) was made up of 3.2 million enterprises in 2009, employing 14.7 million persons and generating EUR 512 000 million of value added. As such, the construction sector accounted for 15.3 % of all enterprises in the non-financial business economy (Sections B to J and L to N and Division 95), employed 11.0 % of its workforce, and generated 9.2 % of value added. The construction sector can be characterised as having enterprises that are, on average, smaller than the non-financial business economy average both in terms of their employment levels or their added value.

The share of personnel costs in operating expenditure (personnel costs plus purchases of goods and services) was 24.0 % in the EU-27’s construction sector in 2009, above the non-financial business economy average of 17.3 %, underlining the importance of labour input in the construction activity as a whole. A number of construction activities (at a more detailed level) are also relatively capital-intensive, for example, the construction of roads and railways (Group 42.1) or the development of building projects (Group 41.1).

Apparent labour productivity in the EU-27's construction sector in 2009 was EUR 35 thousand per person employed and average personnel costs were EUR 30.6 thousand per employee. While apparent labour productivity was below the average for the non-financial business economy, average personnel costs per employee were higher. The relatively low level of the apparent labour productivity is all the more notable given the small proportion of part-time employment within the construction sector: part-time employment has the effect of making this ratio lower as this productivity measure is calculated on a per head basis. The wage-adjusted labour productivity ratio combines the ratios for apparent labour productivity and average personnel costs and is less affected by issues of part-time employment and so facilitates analysis between activities. This ratio is also adjusted for the relative importance of unpaid working proprietors and family workers – which is higher in the construction sector (24.1 %) than in the non-financial business economy as a whole (14.5 %). The wage-adjusted labour productivity ratio shows that value added per person employed in the EU-27's construction sector in 2009 was equivalent to 113.9 % of the average personnel costs per employee, well below the average for the non-financial business economy which was 138.8 %; indeed, this was the lowest value for this indicator across any of the NACE sections that make-up the non-financial business economy.

Unlike the productivity indicators, the gross operating rate (the relation between the gross operating surplus and turnover) for the construction sector in the EU-27 in 2009 was above the average for the non-financial business economy, reaching 10.6 % for construction compared with 9.7 % for the non-financial business economy. This is partly an effect of the relatively high share of self-employment in construction, as working owners and other unpaid persons employed contribute to the value added but are recompensed through a share of profits (not in the form of personnel costs), so boosting the gross operating surplus.

Sectoral analysis

There were 2.2 million enterprises in the EU-27’s specialised construction activities subsector (Division 43) in 2009, almost seven tenths (69.3 %) of all construction enterprises. Most of the remainder, around 870 thousand enterprises or 27.5 % of the construction total, were classified to the construction of buildings subsector (Division 41) and the rest (100 thousand or 3.2 %) were in the civil engineering subsector (Division 42).

On average, civil engineering enterprises in the EU-27 in 2009 were considerably larger than other construction enterprises, probably due to the large-scale investment that is often required in plant and machinery for this subsector. The civil engineering share of construction employment was 11.6 % and its value added share reached 14.2 % (compared with a 3.2 % share in the number of construction enterprises). The construction of buildings subsector also accounted for a larger proportion of construction employment (29.2 %) and value added (33.4 %) than its share of the total number of construction enterprises. Although the specialised construction activities subsector accounted for a smaller share of employment (59.2 %) and value added (52.4 %) than its comparative share based simply on the number of enterprises, it was nevertheless the largest subsector according to both of these measures and contributed more than half of the construction total for both variables.

EU-27 apparent labour productivity in 2009 ranged from EUR 31 thousand per person employed in the specialised construction activities subsector to EUR 43 thousand per person employed for civil engineering, the latter being just above the non-financial business economy average (EUR 41.6 thousand per person employed). Average personnel costs ranged from EUR 28.3 thousand per employee for the construction of buildings which was below the non-financial business economy average (EUR 30.0 thousand per employee), to EUR 32.8 thousand per employee for civil engineering. As already noted, the wage-adjusted labour productivity ratio for the construction sector was the lowest among any of the NACE sections that compose the non-financial business economy, and this was, in large part, due to the particularly low ratio (98.5 %) for the specialised construction activities subsector. As such, this subsector posted the fourth lowest wage-adjusted labour productivity ratio in 2009 for the EU-27 across all of the NACE divisions covered by the non-financial business economy. The wage-adjusted labour productivity ratio for civil engineering (129.8 %) was also below the non-financial business economy average (138.8 %), leaving the construction of buildings to record the highest ratio (140.8 %) and therefore was the only subsector to register a ratio above the non-financial business economy average.

Country analysis

In value added terms, France, Spain and the United Kingdom had the largest construction sectors in the EU-27, the former accounting for a 16.2 % share of the EU-27 total in 2009, while Spain and the United Kingdom both had 15.3 % shares. As such, the relative contribution of the French construction sector to EU-27 value added was somewhat higher than the average French contribution to non-financial business economy value added (14.6 %). The relative importance of the construction sector was considerably higher in Spain (despite the onset of the financial and economic crisis), as the value added from the Spanish construction sector was 1.8 times as high as the average Spanish contribution to the EU-27’s non-financial business economy as a whole. In contrast, Germany (12.0 % of the EU-27’s value added in the construction sector) reported a much lower share than its average (22.1 %) for the whole of the non-financial business economy. In value added terms, Spain had the largest subsector for the construction of buildings (25.3 % of the EU-27 total in 2009); the United Kingdom had the largest civil engineering subsector (18.4 %); and France the largest subsector for specialised construction activities (23.5 %).

The construction sector contributed 19.8 % of total added value in the Cypriot non-financial business economy in 2009 and 16.2 % of the total in Spain, making these the most specialised Member States in value added terms; the next highest share was 13.4 % in Bulgaria. The least specialised country, in value added terms, was Germany as the construction sector contributed just 5.0 % of non-financial business economy value added, which was slightly more than half the EU-27 average (9.2 %); Hungary and Slovakia were the next least specialised Member States in the construction sector. In employment terms a slightly different situation can be observed. Cyprus and Spain remained near the top of the ranking, as construction provided 15.3 % and 14.9 % of the non-financial business economy workforce; however, Luxembourg reported a higher share (17.7 %) and the share in Portugal was identical to that recorded for Spain.

Productivity in the Member States can be compared using the wage-adjusted labour productivity ratio which shows the relative level of value added per person employed compared with average personnel costs per employee, in other words the average value of output compared with the average cost of personnel input. Bulgaria and Romania had by far the lowest average personnel costs in the construction sector and this was reflected in their relatively high wage-adjusted labour productivity ratios (228.4 % and 225.7 % respectively). Cyprus recorded relatively high apparent labour productivity combined with average personnel costs per employee below the EU-27 average resulting in the third highest wage-adjusted labour productivity ratio (192.1 %), ahead of Poland, Ireland and the United Kingdom (the latter two Member States recorded the highest levels of apparent labour productivity within the construction sector). The lowest wage-adjusted labour productivity ratios were recorded in Italy and Greece (94.0 % and 75.1 %). As such, average personnel costs per employee were not covered by the added value generated by each person employed in either of these two Member States’ construction sectors in 2009.

Data sources and availability

Coverage

This article presents an overview of statistics for the construction sector in the EU, as covered by NACE Rev. 2 Section F. Within the construction sector there is a further distinction made between two general types of construction activity on the one hand (Divisions 41 and 42), and a collection of specialised activities on the other (Division 43). These three NACE divisions are described in more detail below:

construction of buildings (Division 41);
civil engineering (Division 42);
specialist activities (Division 43), such as:
- site preparation (including demolition and earth moving),
- installation activities (such as, installation of electrical wiring and fittings, heating systems, plumbing, elevators and insulation),
- completion and finishing activities (such as, plastering, joinery, flooring, glazing or painting),
- other specialist activities, such as, roofing, pile driving, scaffolding.

Some technical activities related to the construction sector, although not formally part of it, such as architectural services, are classified as business services (see article on professional, scientific and technical activity statistics). Some providers of real estate services are closely related to construction and these services are covered in the article on real estate activity statistics.

Data sources

The analysis presented in this article is based on the main dataset for structural business statistics (SBS) which are disseminated annually. The series provides information for each Member State as well as a number of non-member countries at a detailed level according to the activity classification NACE. Data are available for a wide range of variables.

Context

Construction activity and construction products (structures) have a number of specific characteristics that differentiate them from many areas of the economy. Among the most important of these are that the final product is one of the few non-transportable goods, as well as being one of the most durable of human artefacts, forming the physical infrastructure where people live and work. Many construction projects are one-off designs and furthermore the time scale for many projects from conception to completion is typically longer than in many other sectors, and may run to several years.

Public procurement is especially important for construction as the public sector is a major purchaser of buildings and particularly civil engineering works. Construction is one of the most geographically dispersed activities with marked regional differences, and plays a very important economic role in some regions, particularly those associated with tourism, those that are transport and communication hubs, or cultural and sporting centres. Construction is also a highly heterogeneous activity depending on a large number of different specialists. The structure of the construction sector can be viewed as a pyramid, with project coordinating enterprises at the top, subcontracting out work to smaller, specialised enterprises in lower tiers.

In many Member States construction activity is seasonal as it is often conducted in the open air or in unfinished structures without heating or air conditioning. Over a longer time period construction is often sensitive to the overall economic cycle. As a provider of tangible assets it typically leads overall economic movements, although this has not been the case following the recent financial and economic crisis where the downturn in construction activity has continued for much longer than in a range of other activities.

One issue that has gained greater visibility in recent years has been the energy efficiency of structures and the sustainability of construction methods. In 2010 the recast energy performance of buildings Directive was adopted (replacing a 2002 directive on the same subject) in order to strengthen the energy performance requirements of the original directive and to clarify and streamline some of its provisions. Under the new directive, the Member States must apply minimum requirements as regards the energy performance of new and existing buildings, ensure the certification of their energy performance, and require the regular inspection of boilers and air conditioning systems in buildings.

In 2011 the construction products Regulation replaced the construction products Directive that was passed in 1989. This regulation lays down harmonised conditions for the marketing of construction products and forms the central part of the EU’s legislation for a single market in the construction sector. In a similar vein, a Commission Recommendation on Eurocodes was adopted In December 2003 to promote the use of harmonised methods for calculating the strength of structural construction products. The full set of Eurocodes were published in 2006 and cover ten design areas: the basis of structural design, actions on structures, steel, concrete, composite steel and concrete, timber, masonry and aluminium structures, as well as geotechnical design and seismic design.

Further Eurostat information

SBS - industry and construction (sbs_ind_co)

Annual detailed enterprise statistics - industry and construction (sbs_na_ind)

Annual detailed enterprise statistics for construction (NACE Rev.2 F) (sbs_na_con_r2)

Preliminary results on industry and construction, main indicators (NACE Rev.2) (sbs_na_r2preli)

SMEs - Annual enterprise statistics broken down by size classes - industry and construction (sbs_sc_ind)

Construction broken down by employment size classes (NACE Rev.2 F) (sbs_sc_con_r2)

SBS - regional data - all activities (sbs_r)

SBS data by NUTS 2 regions and NACE Rev.2, from 2008 onwards (sbs_r_nuts06_r2)

Dedicated section

Structural business statistics

Other information

Regulation 58/1997 of 20 December 1996 concerning structural business statistics
Decision 2367/2002/EC of 16 December 2002 on the Community statistical programme 2003 to 2007
Regulation 295/2008 of 11 March 2008 concerning structural business statistics