Methodology
To make informed decisions on expansion, it is critical to have market knowledge of various countries. Fast-track access to local expertise in various locations across Europe and the United States, as well as in their respective construction industries, is made possible by the analyses presented in this report.
In order to derive the assumptions made in this report, Turner & Townsend have considered the following variables to describe each analysed market:
- construction output,
- construction employment,
- construction labour cost,
- material costs,
- construction costs,
- tender price inflation,
- market conditions, and
- tendering conditions.
Quarterly data were obtained for most variables from 2018 Q2 to 2022 Q2 to analyse the recent changes, trends and the impact of COVID-19 and the conflict between Russian and Ukraine. Time series data has been sourced from the following institutions:
- Associated Builders and Contractors
- Building Cost Information Service,
- Bureau of Labor Statistics,
- Bruegel on ENTSO-G
- Central Statistical Office,
- Croatian Bureau of Statistics,
- Engineering News Record.
- European Commission,
- Eurostat,
- Federal Reserve,
- Italian National Institute of Statistics,
- National Institute of Statistics,
- Northern Ireland Statistics and Research Agency,
- Office for National Statistics,
- Organisation for economic co-operation and development (OECD),
- Statistical Office of the Republic of Serbia,
- Statistical Office of the Slovak Republic,
- Switzerland Federal Statistics Bureau,
- The World Bank, and
- Turner & Townsend.
There are, however, differences, discontinuities and challenges faced when considering data from several different countries and institutions. Given the diversity of each statistical body, and the variety of locations involved in this study, data has been capped at 2022 Q3 and converted to indices based on 2019 = 100. Also, economic data lags behind current events and not all institutions have 2022 Q3 data available.
As such, empirical analysis content contained within this report is only applicable as of 2022 Q3. Market sentiment analysis – pertaining to tendering conditions and outlook etc. is relevant to Winter 2022/23 due to data collation involving surveys.
Where data availability has been reduced, Turner & Townsend have estimated missing values to allow for a broader comparison. A note has been added below the charts displaying these variables when this has been the case. This includes, but is not limited to, some EU materials data and EU construction employment.
Tender price forecasts, market conditions, tendering conditions, current labour availability and labour availability outlook were collated through a custom survey conducted with experts from Turner & Townsend and associated partners. This data supplemented Turner & Townsend’s suite of International Construction Market Survey (ICMS) documents, several external research institutions, and client commissions.
Considerations
Forward-looking statements are contained within this report that is subject to risk factors associated with macroeconomics and the built environment. It is believed that the expectations reflected in these statements are reasonable, but they may be affected by a range of variables which could cause actual results or trends to differ materially.
These include, are but not limited to underlying price fluctuations; demand; changing market conditions; industry competition; environmental risks; legislative; fiscal and regulatory developments; economic and financial market conditions in various countries.
Whilst the forecasts presented in this report are developed with the best available information to date, extreme events external to the immediate construction industry will influence the global economy and construction industry, however, these are not accounted for in our models.
An example of this would be the 2011 Queensland floods which increased the cost of steel due to its effects on the key input commodities which go into the steel production process. ‘Brexit’ and ‘COVID-19’ are also additional examples, along with the conflict in Ukraine.
The initial effect of the conflict in Ukraine has not been fully realised yet, with just two-quarters of the information available to analyse. Such a small allotment of time is not enough to generate trends or patterns within the overriding data sets and more time is likely to be needed to understand the full impact.
Future statistical revisions by issuing institutions may also affect the statements in this report. As such, it is important to consider updating forecasts every three months to account for new events and market turbulence.
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