Market stabilisation continues and expectations are positive for the coming six months.
Every six months EFCA is conducting a market survey among its members. The results are published in the Barometer report.
The most significant trend emerging from the autumn 2016 Barometer survey of the consulting engineering markets in Europe, is that we can identify a stabilisation of the markets in southern European countries but at a lower level than before the crisis in 2008. The northern European countries have, for several years, seen positive growth, and these markets appear to be stabilising at a high level.
The global size of the architecture and engineering market in Europe is around €350 billion, according to Eurostat.
The sector in general is reflecting the growth of European economies, particularly the level of investment in gross fixed capital formation. The sector is influenced by the budget constraints of the governments across Europe. As the public sector has reduced its investments, the market for engineering services is affected. However, in spite of retraction in the public market, the order stocks of many consulting engineering companies are growing, due to an increase in private sector demand.
The main challenges as perceived by the sector are lack of qualified staff, lack of investments and low fees.
Another challenge is the increasing competition from contractors. This challenge can be disruptive for the building industry, and poses both threats and opportunities for consulting engineering companies.
A second growing challenge is political instability which is affecting the market. Some of the factors are not predictable such as the Brexit-related uncertainty, geopolitical tensions and security threats in Europe and the outcome of elections and referenda across Europe in 2017.
Market developments during 2016 and expectation for 2017
In this EFCA Barometer report (data collected in November 2016), the market signals are positive. Nine out of nineteen countries expect an improvement in order stock over the next six-month period. Of the remaining ten countries in the survey all, except for Turkey, expect orders to be at an unchanged level.
In addition, eight countries expect turnover to increase in the first half of 2017, and importantly, the survey shows an increase in profitability. Finally, there is an expectation that numbers of staff will increase in 10 out of 19 countries.
In conclusion, activity in the consulting engineering industry in Europe is improving. However, Greece and Turkey, are expected to face continued difficulties and are the exception to the rule in this survey.
See also: European Commission Autumn 2016 Economic Forecast: Modest growth in challenging times