Small building companies least affected by economic crisis

05/12/2012 15:00

In the third quarter of 2012, the construction sector faced a 4 percent loss of turnover relative to the same period last year. The number of bankruptcies grew by 25 percent. Employment in the construction sector declined by 17 thousand jobs to 355 thousand. Small companies were the least affected by the economic crisis.

Medium-sized businesses bear the brunt of the economic downturn

In the first nine months of this year, turnover generated by the construction sector dropped more than 6 percent, a reduction by approximately 15 percent, compared to record year 2008. With a turnover loss of about 25 percent, medium-sized businesses were hit hardest. Small construction businesses reported a turnover loss of 2 percent versus 10 percent turnover loss for large building companies.

Construction turnover by company size

Construction turnover by company size

Residential and non-residential building suffer most

The most substantial turnover loss was recorded in residential and non-residential building (9 percent). Medium-sized companies accounted for the most dramatic loss (12 percent).
 
Investments in infrastructure projects accounted for a modest turnover growth by nearly 2 percent in civil engineering during the first nine months of 2012. Large civil engineering companies benefited most, realising a turnover growth of more than 6 percent. Medium and small businesses saw their turnover decline.

Building sum of new orders for architectural projects

Building sum of new orders for architectural projects

Gloomy prospects

The economic crisis makes it unlikely that new construction projects will be started. In  the sector residential and non-residential building in particular, there is little hope for improvement of the situation in the near future. The total building sum of building permits issued for the construction of new residential and non-residential building projects dropped by no less than 24 percent.

The construction of new dwellings and shops has come to a standstill. The number of building permits fell by 36 and 43 percent respectively.
New design orders for architectural firms are also in decline. The value of new orders fell by 10 percent over the first six months of 2012.

Ron Duijkers