Construction activity in Spain might decelerate in 2006/2007, although the production level will remain constant this year, with growth rates similar to 2004. A recent report from Euroconstruct, a leading construction business research group, says the sector shows no immediate signs of decline and that it will preserve its current trend, after three consecutive years of annual growth between 4 and 5%.
Updating its prognosis from a previous report published six months ago, the Catalonia Institute of Construction Technology, ITEC, revised its initial forecast of a 3.4% growth for this year to 4.4%, while keeping its estimate for a deceleration during 2006/2007.
The reason is an increase in demand for new housing units, estimated to reach 640,000 at year-end. Simultaneously, the price evolution impacts older buildings and the annual growth rate foreseen in the previous report exceeds 4%.
On the other hand, the segment of nonresidential construction has not fulfilled the expectations of Euroconstruct’s Spanish member institution, with an increase of only 2.4% instead of 3.1%, while the civil engineering generated a third of the total value in the construction sector.
Euroconstruct's latest construction forecasts reveal that construction growth in 2004 was steady, at 2.1 per cent, in the European countries covered by the report*. Eastern Europe has led the recovery in European construction. After growing at an unspectacular rate of 1 per cent in 2002 and 1.9 per cent in 2003, Eastern Europe emerged as last year's 'star', growing by 6.6 per cent in 2004, compared with a subdued 1.9 per cent from its Western European neighbours. This disparity looks set to widen further with construction output forecast to grow rapidly by 22 per cent to 2007, compared with an expected growth rate of only 5 per cent in Western European.
*COUNTRIES COVERED:
Western Europe
Austria ~ Belgium ~ Denmark ~ Finland ~ France ~ Germany ~ Italy ~ The Netherlands
~ Norway ~ Portugal ~ Republic of Ireland ~ Spain ~ Sweden ~ Switzerland ~ United
Kingdom
Eastern Europe
Czech Republic ~ Hungary ~ Poland ~ Slovak Republic
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