Construction + Civil Engineering

Berner Group has carried out a survey of over 1,227 decision makers within the wood, stone, metal processing and installation technology sectors in a cross-nation barometer, which shows that whilst the outlook for the building trade is certainly not brilliant at the moment, many companies are not dissatisfied with the business year to date.

Thomas Eikel, head of segment management construction at BERNER Group, explains: "The start to 2023 has been solid and has cooled off less dramatically for most trades than was feared in the second half of 2022.” Due to the generally challenging framework conditions, including shortage of skilled workers, interest rate increases, and persistent inflation, 10% of construction professional who were surveyed in 2022 had assumed that business would be ‘worse’ or even ‘significantly worse’ in the first of half of 2023. In fact, only 5% have now confirmed that this has come true, where more than 15% of professionals said that business was better than expected. 

In the country ranking, Italy in particular stood out. “The mood of Italian companies is still at a high-level compared to other European countries,” points out Thomas Eikel. This is mainly due to the fact that order books are shrinking, as is the case everywhere, but are still full as a result of the Italian government’s ‘super bonus’ subsidy programme. “Despite many uncertainties, just 5% of the Italian companies, and thus fewer than in any other of the markets we surveyed, expected their order situation to deteriorate in the first half of the year. With the exception of the installation sector and metalworking trades, the reality then looked even better in the end,” highlights Thomas. More than 25% of the respondents said that their business had developed more positively than expected in the first half of the year.

“In Germany and Austria, there are significantly fewer orders coming in and people are drawing on their existing stock,” reports Thomas. “However, around 10% of construction professionals predicted the first half of the year to be significantly weaker than they assess it from today’s perspective. The situation in both markets is basically similar. However, if we carry out a more detailed analysis of the data, quite interesting deviations are discernible. In contrast to Germany, construction professionals in Austria were very cautiously optimistic.”

Differentiated according to trades, the following picture also emerges for the construction industry: 

• Wood: In the last sector barometer in the second half of 2022, around 11% of companies with a focus on wood (window construction, carpenters, joiners, roofers) expected a weaker order situation in the first half of 2023. In the current survey, by contrast, only 6% now said this had occurred. 13% said that their order situation had developed more positively than in the previous period. The front runner is Italy, where 23% of the corresponding companies said that their business was better. 
• Stone: In the last sector barometer in the second half of 2022, around 9% of companies with a focus on building construction expected a weaker order situation in the first half of 2023. In the current survey, on the other hand, only 5% now said this had occurred. More than 16% said that their order situation had developed more positively. The pole position here also goes to Italy (30%). 
• Metal: In the last sector barometer in the second half of 2022, around 10% of companies with a focus on metal (metal construction and SHK/installation technology) expected a weaker order situation in the first half of 2023. In the current survey, on the other hand, only 5% of respondents now said this had occurred. More than 16% said that their order situation had developed more positively. Italy and France share the top position; in both countries, more than 20% of the respective companies confirmed a better business trend. 

The question of how business will develop in the coming six months is assessed differently depending on the country and the trade. “We do not see a uniform picture here,” says Thomas. “There are many fluctuations in the sentiment index, which are influenced by a wide variety of factors – both positive and negative. For example, the trades that contribute directly or indirectly to the energy efficient refurbishment of buildings and climate change are currently the drivers of a more confident outlook, whilst the stone building contractors tend to be more pessimistic because they are particularly attached to new construction and are also feeling the cooled demand before everyone else.”

He concludes: “In total, the future expectations of companies in the European building trade are about 4 percentage points lower than in 2021, the Covid-19 catch up year in the sector. With the exception of June, which showed a downward trend in all countries and trades, construction professionals were at least somewhat more optimistic than they were six months ago.”