Our previous report, published last year, called on leading entities to take a cautious approach in 2016, in particular because of the state of order books at the end of 2015. This caution has been confirmed by a year that saw the consolidation of business by leading construction companies: a decrease in activity and a slight margin improvement, reflecting a refocus on core business activities and greater selectivity.
2016, a year of consolidation for major construction companies ahead of recovery in 2017
Although leading construction companies had experienced some little growth in 2015, 2016 saw a slight, 1.1% slow-down in their activities and higher operating margins.
Order book developments in leading companies saw a rise of 5.9% by comparison with 2015, reflecting a recovery in the construction sector. Order book depth has improved across the sample, led by the Americas (North and South) but also in Europe, with a return to investment in this area confirmed by FIEC forecasts.
A healthy outlook for construction in Europe in 2017
For the first time since the crisis, the most recent FIEC publication announced a return to growth in almost every European country. With 2017 growth forecasts of 2.2%, mainly in the residential construction and civil engineering markets, and led by a return to public investment. Europe is strengthening.
The message of growing order books is already being reflected in the 2017 first half accounts published by major construction groups, with an average rise in activities of 8%, and 12% in the Building and Public Works sector.
Europe still accounts for the great majority of activity for these construction companies, at 72% on average at the end of 2016.
We invite you on a tour of the European construction market, with contributions from Mazars teams in the 5 main home countries of the leading companies in our sample.
To find out more, please download our study below.
It is obvious that 2015 marked a slight recovery for our sample of major construction groups with an upturn in business and improved operating margins. Growth continues at both sectoral and geographic levels, with a boost in the energy and services sector and growth in business outside of Europe. However, companies are still affected by developments in their domestic markets, as can be seen in France, where construction groups are impacted by a still-sluggish home market.
At Mazars, we have a skilled and experienced multidisciplinary team of professionals who are passionate about their sector and are well positioned to work with and advise you on all aspects of your real estate and property requirements. Our global reach means that we are able to support your international transactions in multiple jurisdictions.