Each
country report includes a brief review of recent key economic and
construction data, highlighting the impact on the building
materials sector. Performances between countries have varied
significantly in recent years. In 2008-10, contruction markets
have generally experienced a downturn, but this has been much less
marked in some EU countries. Analysis of the builders merchants
markets in Germany, France, Belgium/Netherlands includes a review
of the differences in structure of the respective countries,
highlighting key market trends, major suppliers and distribution
issues.
In
overall terms, construction accounts for around 6% of the EU-27
economy, though this varies substantially between countries. For
example, in Ireland and Spain construction output had been well
over 10% of their respective economies up to 2008, but this has
now fallen back dramatically as their respective housebuilding
booms rapidly came to an end.
In
terms of the overall builders merchants market within the European
Union countries, there are various estimates of market size. We
estimate the market in the EU to be worth around €120-125 billion
(Euros) in 2010, equivalent to around £105-110 billion (Sterling),
depending on exchange rates.
The
EU builders merchant market has performed very differently in
separate countries. particularly over the last 3 years, with
Belgium and France performing relatively well. The German
builders merchant market, serving a struggling construction market
in recent years, has not progressed strongly, though has not
experienced the level of downturn compared to the UK and
Netherlands. In the UK, market development has been volatile,
with strong growth in 2004-07, before a relatively strong decline
in 2008-10 compared to other key markets – particularly reflecting
a major decline in housing construction and RMI work.
2011 is expected to be a difficult year thoughout the EU.
Government spending levels are being cut back in virtually every
country to reduce debt levels towards/below the 3% threshold.
Inevitably, public sector construction works are a target for
budget cuts and this is already feeding through into the builders
merchants markets in some countries. In addition, new housing
activity is likely to be impacted as consumer spending and
confidence levels fall, and RMI work typically depends on consumer
confidence which is relatively fragile across all major European
economies.
2011 has seen some significant restructuring with St. Gobain
continuing to strengthen their position in the European market. Thiis
has been achieved with Wolseley agreeing to sell parts of their
group operations to St. Gobain which will have a significant
impact in several key markets – particularly France and the UK.
These companies have expanded further and consolidated their
positions in various markets. Some examples of recent
developments in particular are that CRH has now gained a foothold
in Germany and Saint-Gobain now spans the heavyside and lightside
in the Netherlands as well as in France. In 2009-11, there has
also been significant activity among buying groups with expansion
and mergers/co-operations within national boundaries, as well as
pan-European links being developed.
