Last month 23% of construction companies across the European Union reported problems with materials shortages. While down from 29% in April, the figure remains historically high.
The latest construction bulletin from the research department of Dutch bank ING says that while former supply chain disruptions due to the Covid lockdowns are slowly improving, a new problem has appeared: low water levels. It says that waterways are the main mode of transport for many raw building materials – but, on many rivers, barges can no longer be loaded at full capacity.
This drives up transport costs as barges are only able to sail partially full, with the rest having to be transported by truck. This is on top of already high input prices.
ING is forecasting EU construction growth of just 1.0% this year and 0.5% in 2023. However Germany, France and Spain are all expected to see reduced construction output this year. Spain should rebound very modestly next year with 1% growth but Germany is forecast to see zero growth and France is expected to see a further 0.5% reduction next year.
Volume output construction sector, % YoY
Source: Eurostat, ING Research. 2021 is estimated; 2022 & 23 are forecasts
Read the full Ing EU Construction Outlook here.
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