Construction services are key to the EU economy. Construction works undertaken by builders and developers account for 6.1% of EU GDP and 7.3% of EU employment. Based on its high economic importance and low Single Market integration, the European Commission has identified construction as a priority services sector for Internal Market policy action.
The construction sector was particularly impacted by the economic crisis and its recovery is proving slow in the face of relatively low average productivity and persistent legal barriers. Restrictive national regulation results in little cross-border activity. There is significant untapped growth potential for construction services in the EU today if construction service providers are allowed to make full use of a true Single Market.
The 2006 Services Directive introduced rules and principles to allow services providers across many sectors, including construction service providers, to more easily establish in another EU country or to provide temporary services across borders.
In 2011, the Construction Product Regulation laid down harmonised rules for the marketing of construction products in the EU, and also helped providers use construction products cross-border by introducing common rules for assessing their performance.
For public works, construction service provider activities are also the object of specific EU Procurement Law.
Beyond Internal Market legislation applicable to professional services in the field of construction (architects, engineers and craftsmen), the performance of construction services is directly impacted by specific fields of law, including environmental, energy efficiency, urban and spatial planning, labour and social security law, with some of this legislation introduced at EU level.
The Commission carried out 'performance checks' as part of the work plan announced in its 2011 Communication, 'Towards a better functioning Single Market for services'. This assessed how different pieces of EU legislation applying to services, such as construction services, work together in practice. The fact-finding exercise concluded that there was a significant disparity of implementation of the EU Law in question across EU countries, resulting in barriers to cross-border service provision.
In 2012, as part of the Europe 2020 initiative, the Commission published a Communication, ‘Strategy for the sustainable competitiveness of the construction sector and its enterprises’. One of the areas addressed was the regulatory framework faced by construction economic operators, including construction service providers. The objective is to reduce the administrative burden for construction enterprises. To achieve this, a coherence exercise is underway that examines EU legislation impacting the construction sector is underway.
The Commission recently conducted a study, ‘Simplification and mutual recognition in the construction sector under the Services Directive’, to assess the impact the Services Directive had on authorisation schemes imposed on construction service providers. The study found a wide range of obstacles to both establishment and temporary cross-border provision at the regulatory and administrative level.
In the context of the 2015 Single Market Strategy, the Commission is now preparing legislative action to build on the Services Directive. Reducing administrative and regulatory obstacles to construction service provision across EU countries will ensure that service providers enjoy more of the benefits of the Single Market.