GlobalData, a leading data and analytics company, forecasts that construction output across Eastern Europe will fall by 2% in 2020, whilst output in Western Europe will plummet by 7.3%.
Construction sectors in Western Europe have faced a difficult start to the year as the virus outbreak led to lockdowns and a subsequent slowdown in economic activity. There is a clear divide in the region between those most severely impacted by the virus outbreak, namely Spain, France, Italy and the UK, and those that will suffer a relatively mild contraction in 2020, such as Sweden, Germany and Austria.
Moustafa Ali, Economist at GlobalData, comments: “While reflecting in part the relative successes that countries have had in avoiding a major outbreak of COVID-19, the range of outcomes for construction growth in 2020 are primarily a factor of the extent to which the industry was shut down during the peak of the crisis in March-May. Economic activity has picked up since the reopening supported by strong fiscal and monetary stimulus by the governments and central banks.
"There is a high risk of a second wave of infections in late 2020, but governments in the region are likely to opt for localised containment measures to avoid a repeat of the severe economic disruption caused by the measures imposed earlier in the year."
For large parts of Eastern Europe, the virus outbreak was successfully contained in the first half of the year. The containment of the virus meant that governments across the region had the ability to opt against the severe lockdown measures seen in Western Europe. As a result, the economic cost of the outbreak has been less severe for the construction sector and the wider economy.
Moustafa Ali, Economist at GlobalData, comments: “The outlook for construction in Eastern European remains poor, but the region has thus far not suffered to the same extent as major markets in Western Europe, such as Italy, France, and Spain. Construction output continued to grow in the second quarter of 2020 in a number of countries in the region including Romania, where construction output increased by 9%, and was up by 16.2% in the first half of the year.”
“The region’s construction industry is expected to pick up in the second half of the year following the relaxation of restrictions. However, with the number of cases spiking across the region, the outlook remains uncertain and downside risks are high.”
Read the article online at: https://www.worldcement.com/europe-cis/06102020/globaldata-forecasts-decline-in-europes-construction-output/