Construction of buildings statistics - NACE Rev. 2
Data from March 2020
Planned article update: June 2021
This article presents an overview of statistics for the construction of buildings in the European Union (EU), as covered by NACE Rev. 2 Division 41. It belongs to a set of statistical articles on 'Business economy by sector' .
Building projects typically take much longer from conception to completion than the creation of products in many other sectors, and often involve a large number of subcontracting enterprises with various specializations. Another characteristic of the construction of buildings sector is that this activity is particularly cyclical, influenced by business and consumer confidence, interest rates and government programs; this should be borne in mind when interpreting data that concern recent years which have been affected by the financial and economic crisis.
The construction of buildings sector is one of the smallest (at the NACE division level) within the EU-27’s non-financial business economy (Sections B to J and L to N and Division 95).Around 799 800 enterprises operated in the EU-27’s construction of buildings sector (Division 41) in 2017, accounting for some 3.6 % of all enterprises in the non-financial business economy. These enterprises employed 2.9 million persons, 2.3 % of the employment in non-financial business economy and 25.1 % of the total number of persons employed in construction (Section F). They generated EUR 117.6 billion of value added which was 1.9 % of the non-financial business economy total and 25.4 % of the construction total.
The apparent labour productivity of the EU-27’s construction of buildings sector in 2017 was EUR 41.0 thousand per person employed, EUR 8.5 thousand per person less than the non-financial business economy average of EUR 49.5 thousand per person employed, but slightly above the construction average of EUR 40.0 thousand per person employed. Average personnel costs within the EU-27’s construction of buildings sector were EUR 32.3 thousand per employee, slightly lower than the non-financial business economy average (EUR 34.7 thousand per employee) and the construction average (EUR 35.0 thousand per employee). The EU-27’s construction of buildings sector recorded a wage-adjusted labour productivity ratio of 126.0 %, below the non-financial business economy average (142.7 %), but well above the construction average (114.0 %). This sector’s gross operating rate (the relation between the gross operating surplus and turnover) of 8.8 % was also below the non-financial business economy average (10.1 %) and below construction average (10.2 %).
The construction of buildings sector is composed of two subsectors: the development of building projects (Group 41.1) and the construction of residential and non-residential buildings (Group 41.2). The development of building projects was the smaller of the two subsectors within the EU-27 according to most measures, with 9.8 % of the sector’s employment and 20.8 % of sectoral value added in 2017 — see Figure 1.
Due to its lower value added share, the EU-27’s development of building projects subsector had a much higher apparent labour productivity (EUR 86.0 thousand per person employed) than that for the construction of residential and non-residential buildings subsector. In fact, the apparent labour productivity of the development of building projects subsector was by far the highest among all of the NACE groups within the construction sector. A similar situation could be seen for the other indicators shown in Table 2b. In 2017, wage-adjusted labour productivity and gross operating rates were higher for the EU-27’s development of building projects subsector than for any other NACE group within construction.
By contrast, the construction of residential and non-residential buildings recorded an apparent labour productivity of EUR 36.0 thousand per person employed, below the construction average of EUR 40.0 thousand per person employed and average personnel costs of EUR 31.6 thousand per employee that were also below the construction average of EUR 35.0 thousand per employee.
As noted above, the construction of buildings sector traditionally displays a strongly cyclical development. In value added terms, Cyprus was the most specialised Member State for the construction of buildings sector in 2017 where 5.1 % of its non-financial business economy value added was generated, followed by Finland (4.2 %) and Luxembourg (4.0 %). The least specialized Member States, in value added terms, were Greece (1.1 % of non-financial business economy value added in the construction of buildings sector) and Germany (1.1 %). For the remaining Member States, the share of the construction of buildings sector in non-financial business economy value added ranged from 1.4 % in Slovenia to 3.6 % in Estonia.
In 2017, Germany was the largest Member State for the construction of buildings sector in value added terms, with a 16.9 % share of EU-27 value added; and Spain showed the largest share of the EU-27’s employment with 16.9 %.
Germany recorded the highest level of value added across the EU Member States in construction of residential and non-residential buildings subsector while France recorded the highest level in development of building projects — see Table 3.
A wage-adjusted labour productivity ratio above 100.0 % was observed in all Member State for the construction of buildings sector in 2017, indicating that the average value added generated per person employed was more than average personnel costs. Lowest wage-adjusted labour productivity ratios were 101.4 % in Italy and 103.3 % in Sweden. At the other end of the ranking, the highest wage-adjusted labour productivity ratios were 417.2 % in the Malta, followed by 220.0 % in Romania and 207.7 % in Hungary. These three Member States, as well as Bulgaria, Germany, Estonia, Ireland, Croatia, Cyprus, Luxembourg, Poland and Slovakia, had the wage-adjusted labour productivity ratio for the construction of buildings sector above the average for the non-financial business economy.
Size class analysis
The enterprise size structure of the construction of buildings sector is dominated by micro enterprises (employing fewer than 10 persons). Almost 95 % of all enterprises were categorized as micro enterprises, they employed 46.2 % of the persons employed in the EU-27’s construction of buildings sector in 2017 and accounted for 36.2 % of its value added. While the 400 large enterprises (employing 250 or more persons) contributed 10.7 % of the employment, they generated 18.4 % of total value added, and thereby recorded the apparent labour productivity (EUR 69.9 thousand per person employed) – see Table 5.
Micro and small enterprises collectively employed three quarter of the construction of buildings persons in 2017 for EU total and more than half in nearly all of the EU Member States (for which data are available — see Figure 6): the exceptions were Denmark, France and Austria. The share of the persons employed in large enterprises was less than one quarter in most Member States, the exceptions being France, Austria and Sweden. In value added terms, the contribution of large enterprises reached 55.2 % in France, but was less than 10.0 % in Bulgaria, Ireland, Spain, Italy, Cyprus, Portugal, Romania and Slovakia.
The French capital city region of Île de France recorded the highest number of persons employed, across NUTS level 2 regions within the EU-27, for the construction of buildings sector in 2017. With 107 thousand persons, the Île de France accounted for 3.7 % of those employed in the EU-27 employment for this sector. The second highest number of persons employed was recorded for Cataluña in Spain, where 84.4 thousand persons worked in the construction of buildings sector. Another spanish region; namely Andalucia was the third largest (in employment terms) with 73.9 thousand persons employed in this sector. Overall, the top 20 list of regions in the construction of buildings sector was dominated by Spanish regions, of which there were six, followed by three regions in Poland and Portugal, two Italian regions as well as one each from France, Finland, Lithuania (the whole country is one region at NUTS level 2), the Netherlands, Romania and Sweden.
The ranking of the largest regions (in employment terms) suggests that the EU-27’s construction of buildings sector was particularly developed in and around capital city regions and in regions that contained other large cities. Aside from Paris there was a high level of employment within the construction of buildings sector in the capital city regions of Spain (Comunidad de Madrid), Lithuania, Romania (Bucuresti — Ilfov), Sweden (Stockholm), the Netherlands (Zuid-Holland), Finland (Helsinki-Uusimaa) and Portugal (Área Metropolitana de Lisboa). Other large cities in the top 20 regions included Barcelona (Cataluña), Milano (Lombardia), Seville (Andalucía), Porto (Norte), Valencia (Comunidad Valenciana), and Naples (Campania). The top 20 regions together accounted for 31.6 % of the EU-27’s construction of buildings employment. The relative importance of the construction of buildings sector can be analysed by comparing the employment of this sector with the non-financial business economy employment. Among the 171 NUTS level 2 regions for which data are available in 2017, the median share of the construction of buildings sector in the non-financial business economy employment was 2.6 %. In 10 NUTS level 2 regions, the share of the construction of buildings sector was between 5.0 % and 10.0 % of the non-financial business economy employment in 2017 and peaked at 8.2 for region Illes Balears in Spain. At the other end of the scale, there were 10 regions with less than 1.0 % of the non-financial business economy employment with lowest share of 0.6 % in French region Provence-Alpes-Côte d'Azur.
The analysis presented in this article is based on the main dataset for structural business statistics (SBS) and size class data, all of which are published annually.
The main series provides information for each EU 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.
In structural business statistics, size classes are generally defined by the number of persons employed. A limited set of the standard structural business statistics variables (for example, the number of enterprises, turnover, persons employed and value added) are analyzed by size class, mostly down to the three-digit (group) level of NACE. The main size classes used in this article for presenting the results are:
- small and medium-sized enterprises (SMEs): with 1 to 249 persons employed, further divided into;
- micro enterprises: with less than 10 persons employed;
- small enterprises: with 10 to 49 persons employed;
- medium-sized enterprises: with 50 to 249 persons employed;
- large enterprises: with 250 or more persons employed.
This article presents an overview of statistics for the construction of buildings sector in the EU, as covered by NACE Rev. 2 Division 41. This division includes general construction of buildings of all kinds. It includes new work, repair, additions and alterations, the erection of pre-fabricated buildings or structures on the site and also constructions of a temporary nature. Also included are the construction of entire dwellings, office buildings, stores and other public and utility buildings, farm buildings, and so on.
The development of building projects (residential and non-residential) involves bringing together financial, technical and physical means to achieve the building projects for later sale.
The construction of buildings (residential and non-residential) includes the construction of complete buildings on own account for sale or on a fee or contract basis. Outsourcing parts or even the whole construction process is possible. All types of residential buildings and non-residential buildings are included, such as factories, workshops, assembly plants, warehouses, stores, shopping malls, hotels, restaurants, airport buildings, office buildings, hospitals, schools, religious buildings, indoor sports facilities and parking garages (including underground). Remodeling or renovating existing structures is also included.
This NACE division is composed of two groups:
- the development of building projects (Group 41.1);
- the construction of residential and non-residential buildings (Group 41.2).
The information that is presented in this article excludes the erection of complete prefabricated constructions from self-manufactured parts not of concrete (these activities form part of the wood and metal manufacturing sectors (Divisions 16 and 25 respectively)), the construction of industrial facilities except buildings (which are included within civil engineering, Division 42). Also excluded are architectural and engineering activities and project management services related to building projects (Division 71).
- 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)
- SMEs - Annual enterprise statistics by size class - industry and construction (sbs_sc_ind)
- Construction by employment size class (NACE Rev. 2 F) (sbs_sc_con_r2)
- Annual detailed enterprise statistics - industry and construction (sbs_na_ind)
- SBS - regional data - all activities (sbs_r)
- SBS data by NUTS 2 regions and NACE Rev. 2 (from 2008 onwards) (sbs_r_nuts06_r2)
- Business economy by sector - NACE Rev. 2 (online publication)
- Key figures on European Business – with a special feature section on SMEs – 2011 edition