Western European construction output to contract by 7.3% in 2020

GlobalData, a leading data and analytics company, forecasts that construction output in Western Europe will plummet by 7.3% in 2020, reflecting the impact of COVID-19 lockdowns in the region and the ongoing weakness in the region’s economy.

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 localized containment measures and try to avoid a repeat of the severe economic disruption caused by the measures imposed earlier in the year.”

More Media