Market Analysis
Non-residential Sector Overview
The UK is by far the largest market for non-residential construction, driven by the boom in the service industries and increased public investment. The UK office market is bigger than that in France and Germany combined.
In Europe as a whole, industrial buildings - not offices - make up the biggest market sector, with 80% of non-residential demand coming from private investors.
The sector is smaller than housing but bigger than civil engineering, and is responsible for 3.7% of GDP Europe-wide. It is also highly cyclical. In recent years, public investment has risen steadily, but this has been offset by a fall in spending from the private sector.
Between now and 2008, the forecasters are predicting solid if unspectacular real-terms growth of between 2% and 2.5%.
'Within that number, educational spending will remain strong, while construction of health facilities will stabilise at a high level,' said Patrick de la Morvonnais of French forecasters BIPE.
'Recent indications suggest a slight upturn in industrial production, which might spur a rebound in capital investment.
'But that only translates into construction if companies want to boost capacity, as currently utilisation of industrial facilities remains static at 82%.
'European economic growth will not be strong enough to spur significant capital investment.'
| Western Europe | |||||||
|---|---|---|---|---|---|---|---|
| Year | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 |
| New Non-Residential | -1 | -3.6 | 1 | -0.6 | 2 | 2 | 2.5 |
| Non-Residential R&M | 0.9 | 0.3 | -0.4 | 1.1 | 1.4 | 1.6 | 1.6 |
| Eastern Europe | |||||||
| New Non-Residential | 3.5 | -1.2 | 5.4 | 5.2 | 5.4 | 2.9 | 4.2 |
| Non-Residential R&M | -17.1 | -0.2 | 3.9 | 3.1 | 3.4 | 2.3 | 3.6 |
Western Europe Non-Residential Annual Change in % Real Terms
Eastern Europe Non-Residential Annual Change in % Real Terms
