Worsening of the global economic environment in the third quarter

Sales of the global suppliers of materials and services for construction showed a significant reduction in the third quarter of this year compared to the same period in 2011, mainly due to deepening economic problems in Europe. However, the decreases of the demand in Europe were partially offset by increases in China and northern Asia, although a reduction in the growth of the construction sector in these regions was also noticed. Thus, the economic environment has not improved in the third quarter, maintaining a sense of insecurity among capital markets worldwide. In China, the growth in July-September was weighted for the second consecutive quarter resulting in the stabilization of the businesses in the region, but there cannot be anticipated any increase in the future. Given the current context, the specialists have revised downward forecasts for the global economy this year. Under the new coordinates, global GDP is supposed to grow by 2.2% (compared with the previous estimate of 2.3%), the industrial production will probably increase by 2.8% (vs. 3.4%), while the average value of a barrel of oil will remain at $110. Although a revival of business in the last three months of the year is not anticipated, most managers estimate that the net sales in 2012 will exceed the level of the previous year. Moreover, future plans include further expansion of corporate business globally through both accessing new markets and launching new products. According to Euroconstruct, the worsening short-term economic prospects for the Euroconstruct network has led to a significant downward revision to the construction forecasts for this year and for the next one from -0.3% to -2.1% in 2012 and from +1.8% to +0.4% in 2013. Even with an improving growth rate of 1.7% in 2014, construction output across the Euroconstruct network will still be nearly 12% down on its 2008 outturn at the end of the current forecast period. During the last period of growth (1992-2007) the annual average construction output increase across the Euroconstruct network was 1.5% - applying this growth rate to the future suggests that activity will not return to 2008’s level until around 2023. For further information and a detailed analysis of the current Agenda Constructiilor issue, click here!