Materials shortages ‘won’t halt recovery’
27 September 2021
Research from Dutch financial services group ING points to resilient construction market
The construction market in Europe is set for ‘modest growth’, in spite of the current materials and labour shortages, according to research published by Dutch financial services specialist ING.
Through its THINK economic and financial analysis division, ING said both residential and non-residential construction is recovering and businesses are now increasingly prepared to invest.
Following the average drop of -5.1% in construction output across the EU in 2020, the report forecasts a 5.0% gain in 2021, followed by a further 2.5% gain in 2022.
The report indicated that, where residential and non-residential building work suffered through Covid lockdowns, infrastructure work remained relatively stable, due to its tendency to be undertaken outside.
However, a bad winter saw infrastructure construction output hit, to be followed by a catch-up in March, when weather conditions improved.
Covid-induced supply chain disruptions have also restricted construction output, with a record 15% of EU contractors questioned saying their production was hampered by a lack of materials in August this year.
According to the ING report, shortages are being most keenly felt in Germany, Austria and the Netherlands, where demand continues to be high.
In a European Community (EC) survey, however, almost no shortages were highlighted by construction firms in France, Spain or Turkey.
The reports author, Maurice van Sante, senior economist for construction at ING, said he expects these shortages to continue until at least the beginning of 2022.
In terms of labour shortages, the picture is slightly different. An EC survey reported this as being a problem most significantly in Germany, Austria and France. On average, throughout the EU, 26% of contractors reported labour shortages as an issue.
The ING report highlighted numerous factors indicative of general recovery, including a low number of bankruptcies in the construction sector, EU permits for new homes now standing at above pre-virus level and generally positive results from the EU Construction Confidence Indicator.