According to the Economic and Steel Market Outlook 2020-2021/Q3 2020 Report from the Economic Committee of the European Steel Association (EUROFER), in the first quarter this year the onset of the coronavirus pandemic led to the first drop in EU construction industry output since the fourth quarter of 2016, while growth prospects for 2020 have been substantially revised.
EUROFER said that in the first quarter of the current year construction output still grew in Germany Austria, Sweden and the Netherlands, as well as in France and also in Eastern European countries, at moderate rates, despite the economic lockdown across the EU. It remained unchanged in Belgium, and fell considerably in Italy and Spain, less in the UK.
According to the EUROFER report, gross fixed investment in construction in the first quarter fell by 2.2 percent compared to the first quarter of 2019 and rose by 0.8 percent quarter on quarter, which provided further evidence of some resilience of the sector, despite the evident slowdown observed throughout 2019. Looking at the performance of individual countries, as in previous quarters Eastern European countries generally recorded positive growth rates.
EUROFER stated that prospects for the EU construction sector were hugely impacted by the economic lockdown which European countries experienced from mid-March to early June, with variations in intensity and with some local lockdowns still in place. This has resulted in closures of construction sites. However, some EU countries have explicitly planned to restart public construction activity.
EUROFER noted that, albeit largely affected by the huge disruption caused by the lockdown, the construction industry is expected to perform relatively better than the other steel-using sectors with regards to the expected trend in production activity.
EU construction output is forecast to drop by 5.3 percent in 2020, and will rebound by four percent in 2021