According to the Economic and Steel Market Outlook 2021-2022/Q1 2021 Report from the Economic Committee of the European Steel Association (EUROFER), in the third quarter of 2020, the construction output in the EU declined by 4.1 percent year on year, though it rebounded quarter on quarter since the worst effects of the pandemic were over.
In the third quarter of 2020, construction output benefited from the restart in economic activity all across the EU. Although the construction sector cycle usually reacts more slowly to economic shocks, construction output in the EU fell by 4.1 percent year on year, compared to the exceptional 12.9 percent drop in the second quarter. In the third quarter, construction output grew in Italy, the Netherlands and Sweden at moderate rates, while it fell in all other European countries.
According to the EUROFER report, gross fixed investment in construction in the third quarter fell by 3.8 percent compared to the third quarter of 2019, due to a sharp fall both in residential investment and in other construction investment, while it rose by 11 percent quarter on quarter. Looking at the performance of individual countries, construction investment dropped year on year almost across all countries, albeit at different speeds, with the exception of Italy, Greece and Hungary.
EUROFER stated that prospects for the EU construction sector during 2020 were hugely impacted by the economic lockdown despite the rebound over the third quarter. This has resulted in closures of construction sites from June-July onwards. However, some EU countries have explicitly planned to restart public construction activity as soon as possible.
EUROFER noted that, although it has been 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 regard to the expected trend in production activity.
EU construction output is forecast to drop by 5.7 percent in 2020, and is foreseen to rebound by 4.3 percent in 2021 and 4.0 percent in 2022.