Economic growth in the European region has slowed since the beginning of 2023.The industry association states that 2023 is a year of decline after two years of growth. Total investment in construction in Europe in 2023 will decrease by 2.5% YoY. The market is negatively affected by high interest rates along with the general shaky global economic background. This information is given by the European Construction Industry (FIEC), according to Kallanish.
In 2022, investments in construction in Europe increased by 2.1% YoY, in 2021 – by 4.8% YoY.
According to FIEC’s forecast, Sweden will be the market where the largest reduction will be observed this year (-13.7% YoY). However, the slowdown in investment in construction compared to 2022 will be typical for all major economies. The countries where growth is expected are Portugal (+3.4%) and Ireland (+2.5%).
The Association predicts a reduction in all sectors except civil engineering. It should grow by 2.2% year-on-year. However, there will be a decrease in volumes in both the residential and non-residential sectors.
FIEC explains that last year the sector was affected by economic and political uncertainty, but this negative impact should be fully reflected in 2023.
Private equity news Belgium reports that the increase in prices, the shortage of energy supplies and some construction materials have negatively affected a number of contractors in Europe, many are at risk of not fulfilling contractual obligations or refraining from participating in public auctions.
By the end of 2022, the volume of production in the EU construction sector increased by 4.8%, according to a report by the European Steel Association (EUROFER). The organization expects that construction volumes in the EU will decrease by 1.6% this year and resume to 1.3% in 2024.