China Emerged as Most Promising Emerging Market for European Construction Industry, Reports Timetric

03 Aug 2012 • by Natalie Aster

Executives from the European construction industry anticipate increased levels of consolidation over the next 12 months, as 52% of respondents anticipate either a ‘significant increase’ or an ‘increase’ in M&A activity during 2012. The main reasons for the anticipated increase are the global economic recovery from the recessionary period, pressure on the profitability of smaller construction companies, the growing focus of construction companies on divestitures, and the desire by large construction companies to increase their global presence.

Of respondents across the European construction industry, 41% expect ‘no change’ in their revenue growth in 2012. The European construction industry has experienced a decline in growth over the past three years, due to the recession in 2009 and the European debt crisis. Difficulty in obtaining finance, the downgrade of several European economies by credit rating agencies, austerity measures and low government spending are critical factors affecting the growth of industry.

Both buyer and supplier respondents identified China, Russia and Brazil as important emerging markets for the growth of the European construction industry. The new report "European Construction Industry Outlook Survey 2012–2013: Industry Dynamics, Market Trends and Opportunities, Buyer Spend and Procurement Strategies in the Construction Industry" by Timetric states that China emerged as the most promising emerging market in the European construction industry, as expressed by 39% of respondents.

‘Market uncertainty’, ‘responding to pricing pressure’, ‘reducing demand for products and services’, ‘rising competition’ and ‘cost containments’ are some of the immediate business concerns for the European construction industry. ‘Market uncertainty’ emerged as a leading challenge for the European construction industry in 2012–2013, as expressed by 67% of industry respondents, while the second-largest share of respondents, 50%, identified ‘responding to pricing pressure’ as important.

The average size of the annual marketing budget of European construction industry supplier respondents’ companies is US$1.6 million for 2012. A total of 63% of supplier respondents spend ‘less than US$250,000' on marketing. A total of 23% of the supplier companies have marketing expenditures in the range US$250,000–1 million.

A significant proportion of respondents from construction industry supplier companies expect to increase their marketing expenditure on ‘social media and networking websites’, ‘email and newsletters’, ‘online portals’ and ‘corporate and brand websites’. These respondents plan to shift their marketing expenditure from traditional marketing channels such as ‘newspapers’, ‘radios’ and ‘telemarketing’ to more modern online marketing channels due to the cost-effective nature of modern media.

Report Details:

European Construction Industry Outlook Survey 2012–2013: Industry Dynamics, Market Trends and Opportunities, Buyer Spend and Procurement Strategies in the Construction Industry
Published: July, 2012
Pages: 93
Price: US$ 995,00

‘Customer retention’, ‘customer acquisition’ and ‘brand building or awareness’ are the three main marketing aims identified by supplier respondents. Little interest has been shown in ‘cross-selling or up-selling’ and ‘marketing performance measurement’ as marketing objectives by respondents.

Of all supplier companies, 35% of respondents consider ‘strategic and tactical consulting’ as an important factor when selecting marketing vendors. Meanwhile, 33% of respondents consider ‘ability to target specific audience niches’ and 29% of respondents highlight ‘flexibility in customizing services’ as important attributes for marketing and advertising vendors.

More information can be found in the report “European Construction Industry Outlook Survey 2012–2013: Industry Dynamics, Market Trends and Opportunities, Buyer Spend and Procurement Strategies in the Construction Industry” by Timetric.

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