According to GlobalData’s report, ‘Global Construction Outlook to 2025, Q2 Update’, the countries that suffered the steepest contractions in 2020 such as France, Spain, Italy, and the UK, will be amongst the fastest growing in 2021.
Moustafa Ali, Economist at GlobalData, comments: “Following the gradual reopening across Europe in response to falling COVID-19 infection rates and successful vaccine rollouts, economic activity has picked up again in recent months with sectors such as manufacturing and construction picking up significantly.”
“Regional governments have also put in place significant monetary and fiscal stimulus measures to support the economy, and this will drive the recovery in the near term, particularly for subsectors such as residential and infrastructure, which will be boosted by significant government spending pledges and the low interest rate environment across the region.”
Despite the ongoing recovery, significant downside risks have emerged in recent weeks, including the supply chain difficulties and the rise of the highly infectious Delta variant, which could delay the gradual reopening and may lead to the reimposition of stricter lockdown measures.
Ali adds: “The sharp rise in activity across all sectors of the economy due to pent up demand has led to supply side issues arising, with materials such as plastics, cement, timber, and lumber all in shortage due to excess demand and supply chain difficulties. The upsurge in the price of raw materials and other commodities are a major downside risk for the continued recovery in the construction industry.”
