The Construction Industry in the European Union

The industry sector of construction is a very important one in the European Union. It provides the infrastructure and buildings which are required by all the other sectors of the economy. In fact, the construction sector in the European Union is the biggest provider of employment, and contributes to a major part of the Gross capital of the European Union. Work in this sector covers the entire cycle of economic activities; from the excavation and extraction of raw materials to the process of recycling civil engineering works and buildings. The construction sector in the European Union can be divided into two other subsectors- construction products and construction activity. The focus, objectives and method of working varies completely between these two subsectors, although they are part of the construction sector itself. This shows the scale of the construction industry in the European Union.


The construction industry in the European Union is in its thirteenth year of continuous and uninterrupted growth. In fact, according to the forecasts of leading market experts, this construction boom will last for at least the next three years. During the first half of the 1990s, the construction industry output was consistent at around €1.1 billion. However, in the following years the total output from the construction sector grew by around €200 million, to a total of €1.3 billion in the year 2005. This was despite the weak period of construction in many European Union countries during the years between 2001 and 2003.

An average growth rate of 1.8 per cent was clocked during this period, and the average growth period during the period of 2006 to 2009 was estimated at around 2 per cent per annum, and the total construction output as expected to cross the mark of €1.4 billion by the year 2009. According to leading market experts, the continuously high demand in the residential construction sector, as well as the civil engineering sector, will lead to growth rates of 3 per cent in the total construction output among the countries of the European Union.

Key Players:

France: France accounts for the second largest proportion of the European construction market, contributing around 14 per cent of the total value of the construction sector in the European Union in the year 2004. In the turn of the century, the country’s construction market showed a significant trend of growth, and increased by around 11 per cent during the year 2000 alone. A further climb of 5 per cent was recorded in the year 2001 in the sector. The French construction market was expected to maintain its steady contribution of 14 per cent to the European output, with real term growth expected to be one of the highest in Western Europe. The annual growth of the construction sector in itself is likely to remain at 1 to 2 per cent in the years to come, according to market experts.

Italy: The construction industry has played an important role in the Italian economy in the recent years. In spite of the recent economic slowdown across the world, the new project finance rules and investment policies in the country have been expected to improve and reestablish the construction boom in Italy. The Italian construction market has clocked the ninth consecutive year of property boom, and in the year 2007 it clocked a total of €150 billion in investment in the construction sector. The construction market has grown twice as fast as the overall gross domestic product of the country, and has been recorded at an average of 27 per cent since 1999.

The construction sector employs more than 1.9 million citizens, thus accounting for around 9 per cent of the overall employment in the country. The standard of living of the average Italian has improved significantly in the last three decades, and the increase in the number of rooms and the average size of an apartment in Italy is evidence for this trend. In addition, the percentage of Italians renting has fallen by 20 per cent, leading to a total of 80 per cent of Italian families staying in their own homes. All these factors have contributed to the boom in construction, especially in terms of residential construction, in the Italian market sector.

Growth Figures:

During the course of 14 years from the period of 1991 to 2005, the total construction volume has increased by 1.2 per cent per annum in the European Union. The main contributor to this is the residential construction sector, which clocked an increase of 2 per cent during the same period. Thus, it exceeded the average growth rate if the construction sector. On the contrary, the non-residential construction sector clocked an average annual growth rate of 0.5 per cent, and civil engineering showed an increase of 0.8 per cent in the same year. The non-residential sector, however, has experienced an evolution in the countries of Finland, Hungary, Netherlands and Denmark, especially during the years of 1998 to 2001.

During the period of 1999 to 2003, the civil engineering sector showed a growth rate of 2.5 per cent, with Ireland having been the key investor in infrastructure during that period. While the construction sector is expected to be going upwards in the following years, France, Italy and Great Britain will be the key dominators of the sector. However, Spain is expected to be ahead of the other countries in the following years, after its unevenness in the past years.


The European Commission’s website on Enterprises and Industries provides sector-wise information on the different industries in the European Union. This includes the various policies and regulations of the European Union with regards to each industry.


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