'Sombre time for construction' - FIEC

It is a "very sombre time" for the construction industry in Europe, with austerity measures worsening throughout the continent, according to Thomas Schleicher, president of FIEC, the European Construction Industry Federation.

Speaking at the opening of FIEC's annual congress in Amsterdam, The Netherlands, Mr Schleicher also said that cases of late payment were increasing throughout the EU.

Many small and medium enterprises (SMEs) had already gone bankrupt as a result, he said, and he pointed out that in Italy, €19 billion was still owed to contractors by public authorities.

"Some 2 million jobs have been lost in the construction industry since the beginning of the crisis," he said. "This can simply not continue. Austerity has failed. As investment has been cut, spending has continued."

In place of austerity measures, he called for "clear, smart, targeted investment".

FIEC vice-president Jacques Huillard, responsible for economic issues, said, “There can be no growth without investment."

He said, “On the contrary, investing in building and infrastructure creates growth and jobs. On this basis, the European construction industry is capable of providing solutions for major global challenges, be it energy efficiency in the built environment, resource efficiency, sustainable infrastructure or adaptation to climate change.

“As the trend towards austerity measures shows no sign of reversing, because of the sovereign debt crisis, the EU total construction output amounted to €1,172 billion in 2012, which represents a decline of 4.5% compared to 2011."

In the light of these figures, FIEC is calling on European and national decision makers to take into consideration the potential contribution of the construction industry to EU growth when deciding on structural and fiscal reforms or budget cuts.

Mr Huillard said, “In these difficult circumstances, most FIEC Member Federations say that there will be no recovery before 2014. We must therefore expect a further decline of 2.6% across the whole of the EU in 2013.”

Drastic cuts

FIEC statistics have shown that the reduction in construction activity had been observed in all segments. It said that governmental consolidation measures had led to drastic cuts in public investment, and these cuts have hit the construction of public non-residential buildings (-9.9%) and infrastructure (-6.5%) particularly hard.

Its figures showed that the housing segment had failed to compensate for the decline in other segments. It said the construction of new housing, in particular, had seen a sharp fall (-5.2%) because access to credit was still very limited, and household confidence very low during this time of austerity. It added that this under-performance had not been made up for by renovation, which is also down (-2%).

FIEC said the general downturn in activity had inevitably had a further negative impact on the number of people employed in the sector - in 2012, employment in construction continued to fall in the EU, by 3.1%.

It added that the construction industry remained one of the major engines of Europe’s growth. Its latest figures showed that it represented 9.1% of EU GDP and more than 3 million enterprises - most of which are SMEs - providing jobs to more than 14 million workers.

It said this was without counting the indirect employment generated in related sectors - the multiplier effect where one job in construction equals two further jobs in other sectors.