According to the Economic and Steel Market Outlook 2011-2012/Q3 2011 Report from the Economic Committee of the European Confederation of Iron and Steel Industries (EUROFER), EU construction activity grew eight percent in the first quarter of 2011 compared to the same quarter of the previous year, due to milder weather conditions.
At the country level, Spain's construction crisis continued with output falling by nine percent. On the other hand, activity in Germany increased almost by 36 percent, while Sweden and Poland also registered high output growth in the first quarter.
According to EUROFER, construction activity in the EU is seen to be decreasing due to the fall in the number of large new construction projects because of reduced government budgets for building and civil engineering. Privately funded projects, particularly those in the commercial and industrial markets, suffer from a lack of funding as well.
Construction firms remained dissatisfied with their order intakes, though there are strong indications that residential construction investment is picking up. Renovation and modernization activity is clearly gaining importance in overall construction activity. The focus is currently on the housing sector (primarily in energy saving) and civil engineering (transport infrastructure improvement). While this has a positive effect on total construction activity, the impact on demand for construction steel products is fairly small.
EUROFER predicts that construction output will increase by almost two percent in 2011, followed by 3.5 percent growth in 2012.