The European Demolition Association, EDA, published the European Demolition Industry Report 2015 last month of November, the very first report ever produced about this industry.
One of the main Chapters of the European Demolition Industry Report is the number 3, about the European Market, with a complete analysis of the demolition global industry.
Before understanding the situation of the demolition industry in Europe, the chapter begins with a brief general picture of the European Union’s situation in its economic, social and industrial frames.
After several years of recession and small growth, the actual trend shows growth at a steady pace. Northern Europe will grow more slowly, given that recession was bigger in South Europe and, thus, recovery will be faster as well.
Considering the historical series, starting in 2012, where EU’s GDP decreased a 0.5%, following a 0.0% growth in 2013, and a 1.7% growth in 2014, statistical data for the Q1 2015 reveals that the economic growth in the EU is stable.
The European Commission sets the growth of the GDP in the Euro Area in this Q1 in a 0.4 % over the previous period, and 1.0% over the previous year. Economic recovery in the Euro zone shows slow but steady.
In the social apart, as many governments and institutions declare, the main indicator and source for social stability is work, signalling migration flows and unemployment rate indicators as a key factor for this analysis.
Regarding the unemployment rate (as number of unemployed as a percentage of total labour force), we can appreciate we are currently in a descent, given the rates of previous years.
In 2011, EU had a 9.7%, in 2012 a 10.5%, in 2013 unemployment rate reached its peak with a 10.9% and started its descent in 2014 with a 10.2%. Right now, in 2015, the unemployment rate for the Euro Area has decreased from an 11.5% in Q4 2014 to an 11.2% in Q1 2015.
The final forecast for EU unemployment for the end of 2015 is a 9.6%, and a 9.2% for 2016, according to the European Commission.
On the other hand, the key factors selected for the Industrial analysis are index of production, domestic output price index and waste generation for all industrial activity and households, with special attention to hazardous waste generation as well.
Date shows that since the downfall of -13.9% of the Production Index for EU’s Industry in 2009, year after year, there has been an increase.
Always considering percentages over the previous year indicator, in 2010 the Index of production grew a 6.8%, a 3.1% in 2011, to suffer a down of -2.2% in 2012 and a -0.4% in 2013. Estimations show a slight increase in 2014, according to Eurostat.
Regarding the Domestic output price index, we can appreciate something similar.
Waste generation of all economic activities and households, excluding major minerals waste, expressed in kg per inhabitant and year has no yet recovered levels of years previous to the economic and financial crisis.
The generation of hazardous waste, expressed in kg per inhabitant and year, shows the effects of the economic and financial crisis in Europe.
It suffered a severe descent from 2006 to 2008, from 204 kg/person to 190 kg/person. Since 2008, hazardous waste generation has been growing, up to 201 kg/inhabitant in 2012. Source: Eurostat.
Focus now on the construction global industry, the key indicators for the construction industry analysis in particular are the construction production index, the construction costs index, investment in construction index and a sectorial analysis of the different kinds of construction.
The recovery of the construction sector is about to be a fact. It follows the trends of EU Industry indicators, only that it takes longer to react, so the downfall has been longer, and recovery slower.
Since 2009, the Index of production for construction has been decreasing, from -7.7% in 2009, -2.4% in 2010, -1.2% in 2011, -5.2% in 2012 to -2.13% in 2013 (according to Eurostat).
EU’s construction costs index has been growing since 2009, when it grew 0.8%. In 2010 it increased another 1.5%, in 2011 a 3.0%, in 2012 it grew 1.8% and in 2013, another 0.8%. Source: Eurostat.
2014 seems to be the turning point for this situation in the construction industry, with an increase of 0.7% according to FIEC and 1% according to Eurostat and CECE, in construction output. Euroconstruct states that construction experienced a growth of 1.2% in 2014.
The investment in construction of the EU has been fluctuating throughout the decade, mainly due to the economic context.
In 2011, EU investment in construction grew 0.7%. 2012 and 2013 left negative values in this investment, as it decreased -3.4% in 2012 and another -2.7% in 2013. Forecast states that for 2014, EU’s investment in construction was positive again, with a 0.9% increase. The trend will continue in 2015, and 2016. Source: Eurostat and European Commission.
Demolition global analysis
This analysis of the European Demolition Market is based on data gathered from 254 European companies whose activities are related to demolition, of the 10 countries with National Demolition Association.
As key factors for the analysis, are the main activities of the companies, their volume of business, their work force, and their investments related to the various demolitions aspects (machinery, equipment and consumables).
The main activity for those companies is as general contractor doing all types of demolition jobs regularly. This is followed at distance by demolition contractors working primarily in urban environments, and this, at the same time by demolition contractors who work mainly in industrial environments.
Compared to 2013, data shows certain stability in the evolution of the demolition business in 2014.
The forecast for 2015 to the evolution of the volume of business is consistent with the trends that come from 2014. Even though stability seems to be predominant, increase is going to be bigger than decrease. 41% of the companies expect to remain with the same volume of business, 29% will reflect a slight increase and 10% a significant increase. Whereas 13% will experience a slight reduction in volume of business and 7% a significant reduction.
Another sign of this slight increase of activity and business in the European demolition industry is the evolution of its work force in 2014 compared to 2013. Even though stability is the dominant state (for 47% of the companies), we find again that slight and significant increase of the work force in this companies is bigger than both slight and significant reductions.
The forecast for the change of workforce in the demolition business is the key aspect that shows the biggest stability, with the shades of slight improvement that could be seen before.
The last key aspect taken into consideration for the analysis, the investment in aspects related to demolition (machinery, equipment and consumables) shows the same trends as the previous.
The forecast for investment in aspects related to demolition (machinery, equipment and consumables) 2015 shows, as the change in work force, the face of stability of the demolition business. According to the use of machinery, and at the sight of stability with light increase in business, most companies (42%) will remain with the same investment.
The global analysis resulting from all these key aspects shows that the European demolition business will remain stable in 2015 for the majority of companies.
Recovery has not fully reached yet to the demolition business, but the momentum starts to be positive. A significant number, percentage of companies forecast increase in business and improvement in activity, workforce and investments. Some companies show decrease and reduction, but in total, and keeping a global view, increase and improvement will be more important.
About this Report
The document is available on the website of the association for 200€, with a discount of -10% for members of National Associations which are members of EDA.
EDA members already received their copy of the Report for free, and can order additional copies at a reduced price (-25%)
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