EIC reports cross-border construction decline

New statistics from European International Contractors (EIC), a trade association representing European contractors working outside their national borders, show a cooling in cross-border construction last year. It is a marked turnaround from 2008, when both revenues and new order intake rose to a new high, despite the deep global recession and the crisis in the banking sector.

Revenues earned by European contractors working abroad were down -5.1% in 2009, from € 147 billion (US$ 209 billion) in 2008 to € 140 billion (US$ 199 billion). The value of contracts won meanwhile fell a more pronounced -12% from € 163 billion (US$ 232 billion) in 2008 to € 143 billion (US$ 204 billion).

Historically, the biggest sources of foreign revenues for European contractors have been other countries within Europe. That was still the case in 2009, but Europe was also the hardest hit by the recession. The value of international work carried out fell-12.1% to € 67 billion (US$ 75.7 billion) - the biggest fall of any region. In addition, the new contract intake dropped -18.8%, a figure that was only surpassed by the -19.0% fall in the Middle East.

One of the results of this is that for the first time since 2002 the proportion of foreign work carried out in Europe fell to less than 50% for the EIC's group of 184 internationally active contractors.

Combined with a -2.9% decline in work done in the US and Canada to € 20.5 billion (US$ 23.2 billion), this slide in European work means the proportion of work carried out in developed markets fell to the lowest for eight years in 2009. Only 62.7% of the companies' revenues were derived from mature markets last year, compared to a high of 76.5% in 2003.

Emerging market growth

The growth over the intervening period means the value of these mature markets has grown - from € 54 billion (US$ 61 billion) in 2003 to € 88 billion (US$ 99 billion) last year. However, in the same time the value of work done in emerging markets has rocketed from just € 17 billion (US$ 19 billion) in 2003 to € 52 billion (US$ 59 billion) last year, accounting for 37.3% of international business.

The big change in that period has been the emergence of Africa and the Middle East as serious markets for European contractors. The value of work done in Africa last year was more than four times what it was in 2003, while the Middle Eastern market has increased six fold in the same period.

For more information about the EIC, visit www.eicontractors.de