international
construction
november 2014
NEWSREPORT
14
International activity
Continuedweakness in Europe saw revenues
fall last year for internationally active
European contractors. However, therewas
good growth inmany emergingmarkets and
overall the value of workwon enjoyed a rise.
Chris Sleight
reports.
International
T
hevalueofworkcarriedout inoverseasmarketsbyEuropean
contractors came to € 163 billion (US$ 209 billion) last
year, a -2.7%decline on2012, according tonewdata from
European International Contractors (EIC). However, the trade
association which represents European construction companies
that work outside their national borders added that the value of
new contracts won last year was up+2.4% to €184billion (US$
236billion).
Themain reason for the fall in the valueofwork carriedoutwas
a decline inEurope. Here European contractors working outside
their home country generated revenues of € 69.5 billion (US$
89.4billion), whichwas a -7.6%dropon2012.
Europe as a region does not look healthy for the future either.
Last year was the second year in a row that the value of new
contract awards by contractors fromother parts of the regionwas
down, with a -4.9%decline on the backof 2012’s -5.1%drop.
Thismeant that in terms of both revenues and newworkwon,
Europe made the smallest contribution on record to European
contractors’ total international revenues. Europe still remained
the biggest single region for European contractors – revenues
generated there came to 42.6% of the total in 2013. However,
there has been a long andmore or less uninterrupted fall over the
last decade or so, from the high point in 2005, when the region
accounted for 54.7%of European contractors’ foreign revenues.
There was a similar picture for newwork won. Contracts won
in Europe by foreign European construction companies last year
accounted for just 37.8%of their total, compared to some56.5%
at the highpoint in2004.
But with global revenues and new contract awards generally
climbing over the years, there has clearly been growth elsewhere
in the world for internationally active European contractors.
Indeed, it has come from emergingmarkets, a fact underlined last
year by the -8.2% fall to € 23.7 billion (US$ 30.5 billion) in the
value of work carriedout in theUS andCanada, the othermajor
developedmarket besidesEurope.However,EIC said thisdipwas
duemore to changing exchange rates thanmarket conditions.
The most striking growth last year was in the Middle East,
where the value of work carried out byEuropean contractors was
up +16.5% to € 12.0 billion (US$ 15.4 billion). Coming after
four years of falling activity, this region is far from back to its
former buoyancy.
However, 2013was the second consecutive year to see adouble-
digit increase in the order intake. At € 20.3 billion (US$ 26.1
billion) last year, the value of work won in theMiddle East was
the highest it has ever been in a single year, and about 10 times
where itwas 10 years ago.
But as up-beat as the new orders position looks, the EIC’s
historical data for theMiddle East shows that it can take several
years for actual activity levels to catch up. In addition, the last
time therewas such steep growth in incoming orders was 2005–
2007, whichwas of course followedby a crash.
Africa was also strong last year in terms of new contracts won.
The+25% rise took the total to€18.0billion (US$23.1billion).
This was second only to 2010’s total for new contracts won of €
20.3billion (US$26.1billion), but the value of work carriedout
hit an all-time highof €14.8billion (US$19.0billion).
Growth trends innew contracts and revenues
30%
25%
20%
15%
10%
5%
0%
-5%
-10%
-15%
2003
New contracts
Revenues
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Value of new contracts and revenues -
€
billion
200
180
160
140
120
100
80
60
40
20
0
New contracts
Revenues
2012
168
179
2013
163
184
2009
140
143
2008
147
163
2007
146
121
2006
106
132
2005
106
98
2004
80
84
2003
71
73
2011
169
156
2010
171
141
