Good prospects

A 2.6 per cent increase in the European volume of construction is expected for the current year. This central result announced by the Euroconstruct member institutions, with the Munich-based Ifo Institute representing Germany, is a clear upward correction of their earlier forecast. Six months ago an increase of just 1.5 per cent in construction spending was being taken as the basis for the year 2006. As stated in a press report, however, growth in 2007 and 2008 is expected to weaken slightly, achieving no more than a bare two per cent each. The major dampener will come from the construction of new housing, because there will be an appreciable decrease in the demand for new homes in France, Italy and Spain. The powerful surge in real estate prices over recent years is playing a not inconsiderable role in this development.