European Construction Industry Expected to Achieve Only Slight Recovery in 2004 and 2005

Whereas the European economy in general made very hesitant steps towards recovery in 2003, the construction industry once again lagged behind. In 2003, the real construction volume shrank by 0.2 percent in the 19 countries covered by the "Euroconstruct" research network. This decline was due chiefly to a shortage in demand suffered by the housing industry, the main sector of the construction industry, which produces 45 percent of the construction volume: both rising unemployment (unemployment rate in Western Europe: about 8 percent) and a negative trend in disposable incomes directly impacted on the housing market. At the same time, high consolidation pressure in the EU countries, and in particular in France, Italy and Germany, made inroads on the public sectors' propensity to invest.