The economic forecast for the 2020 end of year financial statements does not look good: The Ifo Institute expects a decline in the gross domestic product by 5.2 percent, the German Federal Ministry of Economics is even anticipating a decrease of 5.8 percent. The turbulence of the past few months has left its mark on the construction industry. However, the effects that have been felt by the construction industry have so far been relatively manageable, with an expected reduction in the real economy in the construction industry of around 3 percent.
Fortunately, most of the construction projects were able to continue despite some impairments from the Corona measures and the reduction in office space development will be a little less than originally forecasted. Additionally, home office and the growing planning uncertainty is leading companies to safeguard their cash instead of building new company locations. The number of new commercial building projects (office space construction mainly) is therefore likely to decline significantly. If you are interested in details, we cover this and similar developments in the construction industry every Thursday in our free recurring webcast about the state of the construction space where we review the data of different verticals.
Of course, the construction industry reacts with a delay of around 1-3 years to economic downturns and we will only know the effects of mass furloughs, exit restrictions, border closings and other measures in the medium term.
It is already clear that the border closings and travel restrictions will have a negative impact on the shortage of skilled workers. Significantly fewer construction orders are also expected from the heavily affected sectors in 2020/21.
This is likely to be intensified considerably by the “legal delay in bankruptcy” – i.e. the suspension of the obligation to file for insolvency until December 31, 2020 (to date). In addition, it can be expected that building material prices will rise in 2021 due to the delivery bottlenecks.
In order to analyze the situation in the construction industry, two different data sources are used in this report. One of the sources is early stage information on construction projects. This is found by using Building Radar’s artificial intelligence platform. Over 400,000 different German and English-language online sources, such as newspapers or architects’ websites, are automatically searched and developed into leads. The great advantage of this method is that new construction projects are found earlier thus developing a complete understanding of all projects in a market or vertical in all stages of the construction process.
The second data source in this construction report are public tenders, from which Building Radar obtains information on construction projects in Germany, Europe and the rest of the world.
In the following analysis, the development over time of the construction industry in Europe and in English-speaking countries is built on the analysis of the previous explain sets of data of early reports on construction projects and public tenders. This gives you a quick and detailed overview of the situation in the construction industry from January through October 2020.
Of course the main question is to what extent the impact of the ongoing pandemic is having on the construction industry.
Development of Public Tenders in 2020
This chapter analyzes the monthly number of public tenders in Europe from January to October 2020. Specifically, we are looking at the development of tenders in Germany, Austria and Switzerland as well as in France, Spain, Italy and Scandinavia. In order to compare Germany and France, the comparative data set is from the same period from 2019.
March and April will be a focus point as it is when the Coronavirus was globally recognized. As a reminder: On February 22nd, Italy imposed the first regional curfew, on March 18th, Angela Merkel gave her TV address and on March 22nd, travel restrictions and other corona measures came into force in Germany, which only were loosened on April 20th.
Tenders in DACH & Europa 2020
The development of public tenders in Europe remains at a healthy level, despite short-term negative affects. It should be pointed out that March recorded a slight increase on the previous month despite the first corona measures being put into effect. In Europe, the number climbed by 3.61% to 78,553 public tenders and, in DACH, it even climbed by 8.10% to 24,974 tenders. This leads to the assumption that the DACH region sees a greater need than the average in Europe to maintain investments during this period and to support them with economic stimulus programs.
A slight downturn was noticeable in April, causing the number of new tenders in Europe to fall by 8.45% and in DACH by 7.75%. It is interesting that the annual low in DACH was reached in May with 21,969 monthly tenders. The European average, which reached its annual low is in August – no surprise as there is usually a summer slump. As expected, a compensatory movement can then be seen, although the data from September to October should be treated with caution, as the Building Radar database for Germany and Austria was greatly expanded in September, which is reflected in both the figures for DACH and in the Reflects figures for Europe.
Tenders in Spain & Italy 2020
In Italy, the situation of public tenders looks a little different than in German-speaking countries. Already in March a clear decrease can be seen from 5,750 to 4,857 monthly tenders (-15.53%). Spain was even more negatively impacted in the same month with a change of 7.82%, but this was just the beginning of a downward trend. It reached its low point a month later with a loss of another 44.18% and is thus well below the low in the summer slump of 2,954 tenders in August. In Italy, no comparable slump can be seen after the first downturn in March, here the number of tenders stagnated until May, only to register a further decrease of 9.42% in June compared to the previous month.
This in turn is immediately followed by an interim high of 5,367 monthly public tenders (+20.31% compared to the previous month), in order to compensate for the previously lower development after the annual low of the following month (-22.56% in 4,156 tenders). This can be seen in a rapid upward movement of a whopping 70.57% to 7,089 tenders in October. In Spain, the countermovement after the summer slump is much less pronounced and with 3970 tenders in October it only almost reached the annual high of 4085 public tenders in June.
Tenders in Scandinavia 2020 (SE, DK, FI, NO)
In Scandinavia, public tenders show a significantly different picture over the same time than in Southern Europe. In spring 2020 the level in Sweden, Denmark, Norway and Finland remained relatively stable, especially in March and April. This could be due to less strict Corona measures than those implemented in many other European countries during this period. Only in Denmark and Norway were there a decline in April with 511 tenders (-22.46% compared to the previous month) and 1,570 tenders (-14.30% compared to the previous month) in this period. In Denmark, however, these will be offset again in May (+27.01% ) and in Norway in June (+14.90% since April).
Then we come to the summer slump, which is particularly pronounced in Sweden and Finland compared to the rest of Scandinavia and it extends over from July to August. In Sweden the number fell in July by -43.20% to 981 tenders, in Finland by -37.08% to 682 tenders. This low level was maintained in both countries in August and only returned to its previous high of June in October, with 1,801 tenders in Sweden and 1,153 in Finland. As mentioned, the smallest movement over the summer can be seen in Denmark. In August there was a decrease of 29.48% to 433 tenders. Just one month later, in September, this is more than compensated for, with an increase of 53.58% over the previous month with 665 tenders; with 8.31% above the level of July, which comes up with 614 tenders.
Ausschreibungen in Germany & France 2020
Tenders in Germany & France 2019
At first glance, the development of the public tenders in Germany in 2020 seems to have hardly been impacted by the pandemic. Pandemic fluctuations are not discernible. In direct comparison with the figures from 2019, it is noticeable that in Germany the absolute numbers of the interim highs of 20,592 tenders in March 2019 and 22,813 tenders in July 2019 were exceeded in 2020. In March 2020 the number was 22,390 tenders (+8.73% compared to the same month last year) and 24,528 tenders in July (+7.52% compared to the same month last year). In contrast to last year, however, a slightly negative trend was recorded in Germany from March up to and including June 2020, which was made up for in July with an increase of 26.77%. The summer slump in Germany was slightly stronger in August at -13.92% compared to the previous month than in 2019 (-9.04% ). As mentioned at the beginning, the drastic increase in September and October 2020 is due to Building Radar increasing the amount of Bids we report on and now cover 98% of all bids.
In France, the picture is reversed compared to the previous year. Here the figures for March and July 2019 are 17,537 and 18,168 public tenders respectively. In 2020, on the other hand, the figures for the previous year, with 14,123 tenders in March (80.53 percent on the same month of the previous year) and 14,193 tenders in July (78.12 percent on the same month of the previous year), are not nearly reached. A slight negative trend is also evident in France from March to June 2020 inclusive. As expected, the summer slump in France in August is strong with -34.17 percent in 2019 and -29.18 percent in 2020, but relative figures do not show any major differences.
Development of Early Reports on Construction Projects in 2020
All online publications and data sources in which you can read about future construction projects and which are published on the Internet in text form in German or English are referred to as early reports on construction projects. These were analyzed by Building Radar up to and including October.
Building Radar discovers these early reports on a daily basis using our artificial intelligence platform. This includes advance notice of planned construction projects at a very early stage. Reports on projects under construction are also identified and analyzed. This enables a structured analysis of the development of construction projects worldwide and thus of the current situation in the construction industry. Manual research or preparation of information published online on construction projects is not necessary with this method.
Development of Early-Stage Construction Reports in Germany 2019 & 2020
In a direct comparison of the early reports on building projects in Germany in 2019 and 2020, the drop in building project reports in spring 2020, which also represent the annual lows, immediately catches the eye. The obvious assumption is the direct influence of the measures against the pandemic. In 2020, however, the second half of the year will be better than in the previous year. All in all, the development of the early reports in 2020 suggests a strong influence by the Corona measures.
At the beginning of a year we can generally assume an increase as the number of proejcts declines at the end of the year due to seasonal factors. As expected, 2019 begins with an upward trend in construction project early reports, which continues until March, with a total growth of 36.29% between March (6,313 construction projects) and January (5,285 construction projects). The first interim low will be reached in June 2019 with 4,716 construction projects, which means a loss of 25.30% compared to March. The following July, with 5,489 early projects, a recovery of 16.39% was recorded. After a further decline to 4,823 monthly construction project reports in August (-12.13% ), the number rose relatively evenly by a total of 10.35% to 5,322 projects by October.
Compared to the previous year, in January, 2020 it starts with 4,589 monthly early reports on construction projects at a similar level to the previous year (4,632). February recorded an increase of 13.77% (5,221 early projects) and is therefore already slightly lower than the same month last year, which was 5,748. In the following March, the monthly early reports on construction projects plummeted and reached 3,279 the annual low with a total of -37.20% compared to February.
This is followed by a recovery phase until July, with a total increase of 94.97% compared to the year’s low and the highest level at 6,393 projects. From June up to and including October, the early reports remain at a constantly higher level than in the previous year and show a similar development of the relative values in this period compared to the previous year.
The lowest point this year was reached in August 2020 with 5,208 early reports, which is -18.54% compared to the previous month’s high for the year. By October, the number of monthly early projects climbed again to 6,118, which means an increase of 17.47% compared to August.
Construction Projects in DACH & Europe 2020
In contrast to the public tenders, the amount of all early projects shows a significant decline in the absolute numbers from March 2020 – both in DACH and in the rest of Europe.
The figures indicate that the development of the newly planned construction projects was already significantly influenced by the pandemic in March. In DACH, a decrease from 5,884 to 4,183 monthly early reports was seen in this month (-28.07%). The numbers for Europe in the same month show a similar reality at -28.91%. The annual low was reached in April both in DACH and in Europe, with a loss of a further -9.75% from 4,183 to 3,775 monthly reports in DACH and a further 14.51% from 7,135 to 6,100 reports in Europe.
After the corona measures were relaxed in April, there was a strong recovery in the early stage projects. After the low in April, there followed a strong recovery phase in both DACH and Europe, at the end of which the number of construction projects almost doubled compared to April. This upward movement reached its peak in July of 7,449 early reports in DACH (+97.32% since April) and 11,959 construction projects in Europe (+96.05% since April).
The summer slump reached its lowest point in August with -18.34% compared to the previous month with 6,083 reports and -17.58% in Europe with 9,857. A recovery of +17.77% to 7,164 monthly early reports was recorded by October. Across Europe, the recovery is +12.11% (11,051 reports in October).
Construction Projects in English-Speaking Countries 2020 (USA, CA, GB, AU)
As in Europe, the development of construction projects in English-speaking countries also seems to have been significantly impacted by the pandemic. In all four countries analyzed – namely the USA, Canada, Great Britain and Australia – the lows are reached either in March or one month later in April.
In the US, the number of early reports on construction projects stagnated until February, only to plummet from 8,948 monthly new project reports to 6,041 in March, a decrease of 32.49%. The year’s lowest point was recorded a month later in April with 5,750 early project reports, a total loss of 35.74% compared to February. It was not until July that the number of new projects in the USA rose to 8,532, a level similar to that at the beginning of the year. A total increase of 48.38% compared to the low in April. In the months that followed, the development of early reports remained at a consistently high level and reached an almost annual high in October of 8,969.
The development in Great Britain remained relatively stable up to and including February (2,909 early reports). In March the number first fell by 21.67% to 2,087 early reports and in April by a further 30.38% to the annual low of 1,539. This is followed by a recovery phase, which culminates in July with a high of 3,070 early reports (+99.48% since April). A slightly negative trend can be seen up to October, with a minus of 13.60% (2,655 monthly early reports).
In Canada, the number of construction projects in spring between February and April fell continuously by a total of 45.47% and has reached a low of 385 monthly early reports. Between April and July, the monthly value recovered relatively evenly, reaching an annual high of 1,020 construction projects with a total increase of 164.94%. The development up to October is relatively subdued with a monthly number of 855 early reports; a total loss of 16.18% from the July high.
Australia appears to be getting the effects of the pandemic under control sooner than the rest of the English-speaking world. At the beginning the development here is still relatively similar compared to the rest of the English-speaking area. The annual low was recorded in March with 731 monthly early reports, which could be due to the significantly smaller distance to China – the origin of the pandemic. After a month of stagnation, a strong upward trend begins, which in May with 1,102 early reports on construction projects (+49.93% compared to the previous month) clearly exceeded the values from February and in July with a total increase of 81.21%, an interim high of 1,292 forms. In the following months, the numbers remained at a similarly high level. The annual high of 1,350 early projects will be reached in September.
Construction Projects in Austria & Switzerland 2020
The development of construction projects is quite interesting in both Austria and Switzerland. Overall, the fluctuation in Austria over the year is considerably higher than in Switzerland, but first let us look at the similarities. In both countries, March and April are the weakest months of 2020, with an initial decline of 6.03% in Austria and 11.35% in Switzerland as early as February. In Austria, the number of early projects fell by a further 29.95% in March from 374 to 262 construction projects and in April it reached the annual low of 247 monthly projects with a further 5.73% in the red.
In Switzerland the situation is a little different. The annual low was already reached in March with a loss of 29.76% from 289 to 203 monthly reports on construction projects. After that, the number in Switzerland rises almost linearly, until September the annual high is reached with 413 monthly early reports (+103.45% since March). In October the upward trend breaks for the first time since February and then decreases by 16.22% on 346 monthly construction projects. A summer slump like in Austria is therefore absent in Switzerland.
In Austria, on the other hand, projects rallied in April and continued to increase until the end of July with a total of +183.40% growth to 700 monthly construction projects. It was not until August that there was a decrease to 498 monthly construction projects (-28.86%), before reaching an annual high of 703 construction projects by October.
Construction Projects in DACH 2020 in the Categories Industry, Infrastructure, Research & Education and Healthcare
When looking at the four construction categories “Industrial Construction”, “Infrastructure Construction”, “Research & Education” and “Healthcare” it is striking that in spring of 2020 a pronounced drop in monthly construction projects can be seen in all four categories. Another thing they have in common is the month of July, which is the strongest month of 2020 in all other categories with the exception of health care.
In industrial construction, the number of early projects fell in March from 473 to 294 (-37.84%), before reaching the low of 238 monthly construction project reports in April with a further minus of 19.05%. This is followed by an upswing with a total increase of +252.10% to 838 reports in July. It is noticeable that the summer months with 658 early reports on construction projects in August and 731 in September are nowhere near as weak as the months in spring. This shows the pandemic as the cause of the weak development in the first half of 2020.
By far the most resilient of the four categories analyzed here is infrastructure construction, which reached a point in February with 1864 monthly early projects, only to mark the annual low of 1,476 (-20.82%) the following March. In the two following months, there was a slight recovery to 1,746 monthly reports (+18.29%). The upswing picked up speed significantly by July and ended with 2,897 early registrations with a further increase of 65.92% from May. In the following two months, the number fell again by 21.23% to 2,282 monthly reports in September, only to approach the highest level of since July in October with +21.25% increase compared to the previous month with 2,767 construction projects.
In the research and education vertical, March and April represent the two weakest months with 500 and 461 monthly construction projects respectively, with a decrease of -42.09% compared to February. This is followed by a strong increase of +104.99 percent. It reached its peak of 945 monthly early projects in July. In August, the numbers fell slightly again by -24.23% (716 reports), which changed only marginally until October, with a total increase of 8.38% (to 776 reports) in relation to August.
The last category is equally as interesting especially now during the pandemic. In the healthcare sector, the downward trend (-4.42%) started in early February, reaching an annual low of 153 monthly construction projects in April, with an overall loss of 32.30% compared to January, which recorded 226 monthly early reports. From April to June a slight recovery of 49.67% can be seen, which only marginally exceeds the previous high of 226 construction projects in January with 229 construction projects in June. After a brief stagnation, projects began to decrease again in August with 176 monthly construction project reports (-23.14% since June). In contrast to the other three categories analyzed, the number of monthly construction projects within the healthcare system did not increase in October, but fell by 7.96% to 185.
Private and Public Construction Projects 2020
A very similar development can be observed when comparing private-sector and public construction projects, with private construction projects overall being at a significantly lower level. After an initial high in February with 1,961 private and 3,028 public construction projects, the number of construction projects in both verticals fell – by 34.22% for early reports on the private sector and by 26.78% for reports on public construction projects.
The monthly early reports of private construction projects reached 952 in April, the annual low with a loss of 51.45% compared to February. This is followed by a rally that peaked in July with 2,473 monthly reports on construction projects, an increase of a respectable 159.77% compared to February. After an interim low of 1,941 early reports in August (-21.52%), the number of reports on private construction projects rose again by 22.72% to 2,382 by October.
In the public sector, the number of monthly construction projects has risen steadily after the slump in March and reached the annual high, also in July, like the private sector. During this period, the number of reports on public construction projects rose by 87.33% to 4,153. The interim low will then be reached in September at 3,247 (-21.82% since July) – a month later than in the private sector. In October the number rose again by 19.96% and climbed to 3,895 monthly early reports.
Closing Statement
About Building Radar
We are a startup built up of over 50 smart and innovative minds. We use artificial intelligence and machine learning to collect and analyze online information about construction projects. Our customers include the biggest players in the construction industry across the globe. Our goal lies: to bring digitization into an established and at the same time long-established industry. Using our artificial intelligence platform, we identify construction projects faster and better than humans could ever do – with over 2,000,000 newspaper articles evaluated every day. As a result, our customers are spending less time searching for new deals and more time focusing on the ones that matter and bring the biggest return. Building Radar enables companies to discover, qualify and close new sales opportunities at the earliest time possible.
Data Sources
Our platform discovers new construction projects worldwide – several months earlier than would be possible with manual research, in some cases many years before construction begins. Thanks to our technology, our customers are among the first to find out about new relevant construction projects worldwide. We can show these projects in a consolidated view in our market intelligence platform for your sales team. Market intelligence makes it possible to understand and analyze the construction industry in depth. Users can accurately determine their own market size and create high-performance market strategies. You can segment important market niches and uncover hidden sales potential.
This works by being able to measure the results of their regions using real market data. With this information, management can make better decisions about future market expansions and the sales teams can make this information actionable by calling into real projects. The data is available at all times and is update as the information comes out. All evaluations of this report were created on the basis of the market intelligence solution. This is a representative of the data that was discovered in the 2020 year. Our data sources are growing daily and we are constantly working on improving the classification and recognition rate. For example, we are able to recognize multiple reports on the same construction project as such and merge them in our data using artificial intelligence. The data collected is not the result of manual research into building information.
Definition of Terms
In this construction report, a distinction is made between data from private tenders, public tenders and early reports on construction projects. Early reports are mostly private construction project information, which may overlap with tender information. In the early notifications, certain construction project categories (industry, education & research, infrastructure, etc.) are reported, which are usually (must) also be advertised publicly. We are constantly working to improve our technology so that a construction project only flows into our data once. However, we cannot guarantee this one hundred percent. The present evaluation therefore only represents an observation of market trends. The data do not claim to be complete. Often it also happens that a construction project combines several categories, which we classify accordingly.