Market Drivers in the ... · Decisions Interconnection is the leading Institution for market data...
Transcript of Market Drivers in the ... · Decisions Interconnection is the leading Institution for market data...
Interconnection Vienna I Oberstdorf I Lviv
we show you the way www.interconnectionconsulting.com
Bucharest, May 15th 2012
Market Drivers in the European Construction Industry
2 © Interconnection
Interconnection Provides Data for Companies Decisions Interconnection is the leading Institution for
market data in the construction segment.
Leading companies support our studies with aims statements, definitions of marketing strategies, competition perception and controlling of marketing measures.
Interconnection covers its know-how through over 100 international market studies per year as well as some series of ad-hoc studies in the construction sector.
Besides market data we offer ad-hoc studies with priorities in distribution analysis, pricing, market entrance strategies, customers satisfaction, image analysis, etc.
Our analysts support company also with the implementation of data into deeds.
Introduction
3 © Interconnection
IC Market Tracking
Market research on a quarterly/annual basis, forecasts for the total market; market shares; company and strategy portfolios, etc.
IC Channel Tracking
Annual tracking of the distribution system; detailed dealer profiles; dealer sales by brands; development of brands, distribution channels; dealer satisfaction with listed brands, etc.
IC Price Tracking
Monthly collected database with 800 prices; statistical analysis of prices; positioning of dealers by brands, product groups, technologies and distribution channels.
IC Brand Position Tracking
Annual brand image analysis by segments and technologies; brand awareness and brand recognition; brand potential, analysis of purchasing motives.
Multi-Client Reports
Customer Satisfaction
Market Analysis
Market Entry
Market Forecast
Pricing Strategies
Price Monitoring
Distribution Analysis
Brand / Image Analysis
Brand Equity
Geomarketing
Product Tests
Advertising Impact
Focus Group Interviews
Exclusive Ad-hoc Research
Introduction
4 © Interconnection
Content
2. National Economy
1. International Economy
3. Demography
4. Construction Environment
5 © Interconnection
Influencing Factors in the Construction Industry
Construction Industry
Economic Situation Economic growth has direct impact on non-
residential sector & influences residential sector indirectly
Long-term interest rate Low interest rate stimulate the economic
participants to take out a loan and invest in buildings or infrastructure
Dem
ogra
phic
Dev
elop
men
t In
crea
sing
Num
ber o
f hou
seho
lds
resu
lts in
ris
ing
dem
and
of fl
ats
and
dwel
lings
Econom
ic policies G
overnmental subsidies stim
ulate residential and non-residential sector
6 © Interconnection
The Perils after the Crisis
The first wave of economic crisis is over
Now follows the second period
• With a high degree of national debts throughout Europe (GRE, POR, etc.), but also in the US and Japan
• Austerity packages
• Currency Problems
• Non performing loans
• Inflation
• Other Risks
International Economy
National Economy Demography
Construction Environment
7 © Interconnection
Europe's Business Engine Not Among the Top 3
4,4%3,8%
3,0% 3,0% 3,0%2,5%
2,0% 2,0% 1,7% 1,6% 1,6% 1,5% 1,2% 0,9% 0,8% 0,7%
SWE POL SVK GER SLO FIN CZE AUT SUI FRA NOR HUN ITA GBR DEN ESP
GDP-Growth: Comparison of Growth 2011, in %
Source: EIU Country Data, 01/2012
Ø EU 27: 1,6%
International Economy
National Economy Demography
Construction Environment
8 © Interconnection
Eastern Europe Proves to be More Dynamic
Source: EIU Country Data, 05/2012
6,4
4,3 4,1
5,86,7
5,7
7,5 7,5
4,63,4 3,8
2,43,3 3,7 3,8
4,1
1,92,5 2,1
3,32,2 1,7
-0,30,8 1,3 1,8
-5,7
0,01,31,4
3,1
-4,2
-8
-6
-4
-2
0
2
4
6
8
10
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
CEE
WEU
GDP-Growth in %; Comparison between Western & Eastern Europe 2000 – 2015
International Economy
National Economy Demography
Construction Environment
9 © Interconnection
Greece Ranks 1st When it Comes to Public Debts Europe: Public Debt in % of GDP, Budgetdefizit 2010 in %
Source: EIU Country Data, 05/2012
Public Debt 2012 Budget Deficit 2012
International Economy
National Economy Demography
Construction Environment
10 © Interconnection *Rated by Fitch-Scale; 03/2012
North-South Division in Europe
• Country Ratings in Europe
International Economy
National Economy Demography
Construction Environment
11 © Interconnection
More than 40% of Non-Performing Loans Lost in the Ukraine
41,6%
19,2% 17,9% 17,5%
10,4% 9,5% 9,0% 8,8% 7,8% 7,8% 5,8% 5,6% 5,5% 4,9% 3,3% 2,5%
UKR LIT LAT ROU IRE RUS GRE CRO BUL HUN SLK EST ESP CZE POR SLO
Non-Performing Loans: Share of non-performing Loans 2010, in %
Source: World Bank 2011
International Economy
National Economy Demography
Construction Environment
12 © Interconnection
0%
5%
10%
15%
20%
25%
0% 1% 2% 3% 4% 5%
Inflation-Unemployment Portfolio 2011 (EU-27 + Norway & Switzerland)
Spain with Highest Unemployment Rate
Euro Area Ø: 3,0%
Euro Area Ø: 9,6%
Source: EIU Country Data, 02/2012
Une
mpl
oym
ent r
ate
2011
in %
Inflation rate 2011 in %
International Economy
National Economy Demography
Construction Environment
13 © Interconnection
4,3
-9,3
-28,8
-4,6
1,4
-4,2
-17,5
-22,8
-12,8
-14,2
0,9
-15,8
-36,0
-29,9
-26,6
-40
-30
-20
-10
0
2007 2008 2009 2010 2011
Industry Consumers Construction
0,0 0,6
4,4 5,05,2
3,52,9
0,1
-2,4
-5,7-6,8 -7,6 -7,3
-11,5
-11,0
-12,6
-12,8
-13,9
-10,7 -10,9-12,4
-16,8
-20,2-20,9 -20,8
-27,6
-28,3 -28,1
-28,0
-25,6
-27,4-26,2
-25,9 -26,1
-25,0-26,0
-28,5
-27,5-28,5
-31,9
-30,7
10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1
Industry Consumers Construction
EU: Indicators of Confidence
Consumers Confidence Still Low
2011 2010
Source: EU-Commission 02/2012
2012
International Economy
National Economy Demography
Construction Environment
14 © Interconnection
5,6
-20,9
-14,2
-20,7
-26,9
-17,4
Germany EU France Spain Italy UK
-26,6-31,2
-40,6
-12,0
-33,9
-8,6
Germany France Spain EU Italy UK
Source: EU Commission 02/2012
Consumers
Construction
Indicators of Confidence in Europe Top 5: 2012
Consumers Are More Confident than Construction Industry
International Economy
National Economy Demography
Construction Environment
15 © Interconnection
It‘s the Economy, stupid...
Lessons learned from the crisis:
Economic growth should be based upon export industry, not upon consumption or credit
Risks of banks should be in relation to size of national state
Corruption undermines development of middle class and leads to political risks
High national debt steals politcal scope
Debts are quick to make, but need decades to be reduced
International Economy
National Economy Demography
Construction Environment
16 © Interconnection
Content
2. National Economy
1. International Economy
3. Demography
4. Construction Environment
17 © Interconnection Source: EIU Country Data, 02/2012
The Economic Powerhouse in Europe Germany: Annual Change of GDP in %; Unemployment in %
2011 turned out to prove Germany as a strong and resilient economy especially against the background of the weak Southern Euro-economies
Due to Germany’s strong competitive edge creating undesirable current account imbalances, measures to boost German domestic demand and consequently reducing exports are most likely.
Against the backdrop of a persisting extremely low interest rate level this may benefit domestic demand with a strong impact on housing and construction activities.
International Economy
National Economy Demography
Construction Environment
GDP-Growth (yoy in %)
Unemployment in %
18 © Interconnection Quelle: EIU Country Data, 02/2011
UK Sliding Into Recession Again
After a short period of growth in 2011 the UK is sliding into recession again
An undesirable inflation exceeding 3% is putting pressure on the Bank of England against the background of the high sovereign debt
Persisting high joblessness rate with political reforms under way to tackle this problem
UK: Annual Change of GDP in %; Unemployment in %
GDP-Growth (yoy in %)
Unemployment in %
International Economy
National Economy Demography
Construction Environment
Source: EIU Country Data, 02/2012
2,1-0,40,9
0,91,8
-1,1
-4,4
1,9
1,60,8-0,6-4,1
1,70,4 1,4
1,6
'08 '09 '10 '11 12e 13f 14f 15f
UK Eurozone
7,8 8,68,0 8,38,65,6
7,6
8,0
9,810,210,610,410,010,1
9,67,5
'08 '09 '10 '11 12e 13f 14f 15f
19 © Interconnection Quelle: EIU Country Data, 02/2011
Account Deficit, Competitive Losses, High Joblessness Rate
Economic recovery still weak with GDP growth rate below 1%. Weak investments and account deficit.
Inflated public sector and a labor market structured to hinder job creation
State dominance in the economy accounting for a share exceeding 50% of the economy
Prerequisites for a sustainable recovery still lacking
France: Annual Change of GDP in %; Unemployment in %
GDP-Growth (yoy in %)
Unemployment in %
International Economy
National Economy Demography
Construction Environment
Source: EIU Country Data, 02/2012
20 © Interconnection Quelle: EIU Country Data, 02/2011
Still Mired in Deep Recession
Despite initial bold fiscal reform steps undertaken by government of technicians for reducing the deficit, growth oriented reform commitment has meanwhile stalled, especially on the labor market. This has lead Italy into a still deeper recession.
Still persisting high youth joblessness rate of reaching almost the level of 30%; two-tier labor market; companies reluctant to hire because of a unique workplace protection for the incumbents
Significant contraction of domestic demand
Italy: Annual Change of GDP in %; Unemployment in %
GDP-Growth (yoy in %)
Unemployment in %
International Economy
National Economy Demography
Construction Environment
Source: EIU Country Data, 02/2012
21 © Interconnection
GDP-Growth (yoy in %)
Dramatic situation on the labor market, significant economic contraction. Joblessness rate of more than 20%, the highest in Europe
Further economic contraction due to
recession-inducing expenditure reductions in view of taming the deficit and bringing it in line with EU-guidelines
Construction sector, previously the main
economic driver still in the doldrums with housing prices in free fall
Weak banking sector in need of huge
amounts of capital for facing possible non-performing house loans
Quelle: EIU Country Data, 02/2011
Dramatic Situation on the Iberian Peninsula Spain: Annual Change of GDP in %; Unemployment in %
Unemployment in %
International Economy
National Economy Demography
Construction Environment
Source: EIU Country Data, 02/2012
22 © Interconnection
Income: Net Income by Households in EUR
32.91327.541
26.396
20.614
20.347
18.522
18.133
17.409
17.072
16.987
16.606
15.119
14.51811.831
19.377
18.865
17.508
19.86415.433
20.973
19.415
20.343
22.866
20.255
23.256
32.188
38.01342.696LUX
SUI
NOR
FRA
DEN
AUT
NED
GER
FIN
BEL
SWE
UK
ITA
ESP
37.50033.950
31.178
27.414
23.349
22.984
22.251
22.136
21.542
21.124
21.106
19.142
16.66714.255
23.395
24.795
22.193
20.40316.126
23.020
27.107
26.216
26.817
26.234
29.415
39.002
42.14842.013NOR
LUX
SUI
DEN
FIN
SWE
NED
FRA
GER
BEL
AUT
UK
ITA
ESP
With Kids Without Kids
Families (2+)…
With Kids Without Kids Singles…
Spanish Households with Lowest Income
Source: EUROSTAT 2011
Ø EU 27: 14.786 Ø EU 27: 18.113 Ø EU 27: 15.775 Ø EU 27: 18.982
International Economy
National Economy Demography
Construction Environment
23 © Interconnection Source: EIU Country Data, 02/2012
Italy Faces Dramatic Slump Private Consumption in Europe Top 5: Annual Change in %
Private Consumption Private Consumption
Private Consumption
Private Consumption
Private Consumption
International Economy
National Economy Demography
Construction Environment
0,8
1,2
-0,6
-0,70,7
1,5
-1,5 -3,5
1,7
1,2
1,00,3
-0,60,4-1,2
0,3
'08 '09 '10 '11 12e 13f 14f 15f
24 © Interconnection
Content
2. National Economy
1. International Economy
3. Demography
4. Construction Environment
25 © Interconnection
82,0
64,4
61,6
60,0
45,8
16,5
10,8
9,3
8,4
7,7
5,5
5,3
4,8
0,5
Source: EUROSTAT 2011
2010
81,8
64,7
62,0
60,3
46,0
16,6
10,8
9,3
8,4
7,8
5,5
5,4
4,9
0,5
GER
FRA
UK
ITA
ESP
NED
BEL
SWE
AUT
SWI
DEN
FIN
NOR
LUX
2009
European Population in Mio. 2009 & 2010; Annual Change 2009 – 2010 in %
Change in %
-0,2%
0,5%
0,7%
0,5%
0,4%
0,5%
0,8%
0,9%
0,2%
0,4%
0,5%
1,2%
1,7%
1,1%
Germany the Only Country with Decrease
International Economy
National Economy Demography
Construction Environment
26 © Interconnection
1990-2010
EU-27: Population Pyramid 1990-2010 und 2010-2060
Men Women
Age 2010-2060
% %
Men Women
Source: EUROSTAT 2011
The Urn is Coming
International Economy
National Economy Demography
Construction Environment
27 © Interconnection
Content
2. National Economy
1. International Economy
3. Demography
4. Construction Environment
28 © Interconnection
Recovery in 2012 Expected Western Europe: Building Completions 2006 - 2014f, Quantity in Dwellings, Value in Mio. Euro
Quantity
Value
Annual Change
in %
International Economy
National Economy
Construction Environment Demography
350.923362.423
338.290 275.716234.539 218.845 232.861 248.835 269.712
2.165.697 2.260.4182.142.455
1.725.928
1.426.6371.263.544
1.305.012 1.369.412 1.460.456
2006 2007 2008 2009 2010 2011e 2012f 2013 2014f
3,3%
-6,7% -18,5% -14,9% -6,7% 6,4%
6,9% 8,4%4,4%
-5,2% -19,4% -17,3% -11,4%
3,3% 4,9% 6,6% Value
Quantity
5,4%
3,7%
CAGR11-14f
Forecast
29 © Interconnection
CEE 5 Takes More Time to Recover Building Competitions Residential Sector Eastern vs. Western Europe 2007-2014f in Mio. EUR
362.423 338.290
275.716234.539 218.845 232.861 248.835 269.712
6.879 7.775 7.318 6.562 5.124 5.015 5.640 6.293
369.302 346.065283.034
241.101 223.969 237.876276.005
254.475
2007 2008 2009 2010 2011e 2012f 2013f 2014f
WEU
CEE 5
EU
-14,9% -6,7%
6,4% 6,9%
-10,3% -2,1%
8,4%
-18,5%-6,7%
11,6%12,5%
-21,9%-5,9%
13,0%
International Economy
National Economy
Construction Environment Demography
30 © Interconnection
Increasing Number of Building Permits Western Europe: Building Permits vs. Building Completions 2006 - 2014f
International Economy
National Economy
Construction Environment Demography
2.677.159
2.445.148
1.744.461
1.384.927 1.367.648
1.371.8471.518.259
1.621.6571.730.6882.165.697
2.260.418
2.142.455
1.725.928
1.426.637
1.263.5441.305.012 1.369.412
1.460.456
2006 2007 2008 2009 2010 2011e 2012f 2013 2014f
Building Permits
Building Completions
-8,7%-28,7% -20,6%
-1,2%
0,3% 10,7% 6,8% 6,7%4,4%
-5,2%-19,4% -17,3% -11,4%
3,3% 4,9% 6,6%Building Permits
Building Completions
Forecast
31 © Interconnection
Dwellings with Better Outlook… Western Europe: Building Completions 2006 - 2014f, Flats & Dwellings
Flats
Dwellings
Annual Change
in %
International Economy
National Economy
Construction Environment Demography
874.520 888.099 782.219 676.478 601.774 588.139 627.031 661.416 694.367
1.291.157 1.372.3201.360.576
1.046.720824.863
675.406 677.981 707.996 766.089
2006 2007 2008 2009 2010 2011e 2012f 2013 2014f
1,6%
-11,9% -13,5% -11,0% -2,3%
6,6% 5,5% 5,0%6,3% -0,9%
-23,1% -21,2% -18,1%
0,4% 4,4% 8,2% 1+2 FD
Flats
4,2%
3,2%
CAGR11-14f
Forecast
32 © Interconnection
…and Gaining Market Share Western Europe: Building Completions 2006 - 2014f, Quantity in %
Flats
Dwellings
International Economy
National Economy
Construction Environment Demography
40,4% 39,3% 36,5% 39,2% 42,2% 46,5% 48,0% 48,3% 47,5% 47,6%
59,6% 60,7% 63,5% 60,6% 57,8% 53,5% 52,0% 51,7% 52,5% 52,4%
2006 2007 2008 2009 2010 2011e 2012f 2013 2014fAverage
Share 11-14f
Forecast
33 © Interconnection
Picture
1,59:2,1 Contact
Interconnection Consulting I Vienna • Oberstdorf www.interconnectionconsulting.com
For further questions please do not hesitate to contact us!
Interconnection Consulting
Getreidemarkt 1, A-1060 Wien
Dennis Rauen – Market Analyst
Tel: +43 1 5854623 - 39 Fax: +43 1 5854623 - 30
Dr. Frederick Lehner – Managing Director Tel: +43 1 5854623 -11
Fax: +43 1 5854623 - 30 [email protected] I
C we show you the way