FINANCE
15
CONSTRUCTION EUROPE
SEPTEMBER 2013
small losses against the British
Pound and Swiss Franc.
Elsewhere in Europe, the
Euro was up against both the
Norwegian Kroner and Swedish
Krona, along with the Hungarian
Forint. However, it lost some
ground to several key currencies
in central Europe, including the
Czech Koruna, Polish Zloty and
Romanian Lei.
OUTLOOK
Notwithstanding the gains for
the construction sector this year,
industry share prices are still
looking sickly compared to the
gains for some of the mainstream
indexes. It will take a more
convincing and prolonged global
economic recovery for the sector
to take-off, and that might be a
RESERVE CURRENCIES
Beginning
End
Change
Change
of period of period
(%)
British Pound
0.8581
0.8554
-0.0027
-0.31
Japanese Yen
129.25
131.96
2.72
2.10
Swiss Franc
1.2360
1.2343
-0.002
-0.14
US Dollar
1.2889
1.3340
0.0451
3.50
EUROPEAN CURRENCIES
British Pound
0.8581
0.8554
-0.0027
-0.31
Bulgarian Leva
1.9549
1.9556
0.0007
0.03
Czech Koruna
25.82
25.69
-0.137
-0.53
Danish Krone
7.4593
7.4594
0.0001
0.00
Hungarian Forint
294.22
298.93
4.71
1.60
Norwegian Krone
7.8843
8.1256
0.2412
3.06
Polish Zloty
4.2829
4.2403
-0.0427
-1.00
Romanian Lei
4.4383
4.4350
-0.0033
-0.07
Swedish Krona
8.6281
8.7191
0.0910
1.05
Swiss Franc
1.2360
1.2343
-0.0017
-0.14
Period: Week 27 - 34
Index
Beginning
End
Change
Change
of period of period
(%)
CEE (Equipment)
232.56
239.86
7.30
3.14
CEM (Materials)
139.16
145.04
5.88
4.22
CEC (Contractors)
129.17
138.99
9.82
7.60
CET (Total)
165.34
172.63
7.29
4.41
Dow
14989
14964
-25
-0.17
FTSE 100
6436
6433
-3
-0.04
Nikkei 225
14310
13661
-649
-4.54
CAC 40
3809
4033
224
5.89
DAX Xetra
8015
8378
363
4.53
Period: Week 27 - 34
VALUE OF €1
KEY INDEXES
Confidence ticks up
Results from the August
CE
Barometer
survey showed the strongest sentiment
in the industry for two years, but it
is too early to herald a full-blown
recovery
August saw some improvement
in European construction activity
according to the results of the
CE
Barometer survey. However,
the industry remained at a low
ebb compared to the position two
years ago.
It was the first time in almost two
years that respondents to the survey
were positive on all three measures of
confidence. A balance of +2.1% said they were busier in August
than the previous month, while +4.2% said they were busier than a
year ago and +30.2% said they expected activity levels to be higher
in a year’s time. The balance figure is the percentage of positive
responses, minus the number of negative ones.
The key turnaround was the response to the question about
activity levels compared to a year ago. This has been deeply
in negative territory since early 2012. Of the other confidence
measures, results about month-to-month activity have wavered
either side of 0 since mid-2011, but respondents have been
consistently positive about future prospects since the final quarter
of 2012.
As a result of these figures, the
CE
Climate, a composite measure
of confidence stood at +12.2%, the highest it has been since
August 2011, but some way from the levels of +25% or more that
have previously characterised a consistent market recovery.
It would also be dangerous to herald an industry recovery on
one month’s data. Experience has shown the
CE
barometer can be
susceptible to one-off peaks & troughs.
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CE
BAROMETER
long time coming for European
contractors relying on their weak
home markets.
Having
said
that,
this
summer’s improvements in
the construction sector’s stock
market performance have come
on the back of fairly lacklustre
results for the first half of the year.
Despite the uninspiring global
economic outlook, companies
are still managing to perform
and turn a profit.
The expectation that the
global economy will continue
to gradually improve should
continue to lift the sector.
However, with no ‘boom’ on the
horizon, it remains to be seen
what will happen with this
cyclical sector.
In previous years, industry
profitability (and therefore share
prices) have taken off on the
back of robust GDP growth. One
school of thought is that once
economic growth gets above a
certain level, capital investment
turns on to a level that really
lifts the construction sector, be it
contractors, materials producers
or equipment manufacturers.
However, with a gradual
recovery taking place, and the
expectation being for steady
but unspectacular growth in
the future, it remains to be seen
how investors will react. So far
this year the construction sector
has been flat on European stock
markets. Although there has
been some benefit from outside
the region, the continued fall in
European output has offset this.
Growth
in
share
prices
should come as the European
construction market recovers
The survey, which takes just one minute to complete, is open to all
construction professionals working in Europe. The
CE
Barometer
survey is open from the 1
st
to the 15
th
of each month on our
website. Please take part!
■
Full information can be found at
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It was a mixed
few weeks on the
currency markets,
with the Euro
gaining good
ground against
the US Dollar
and Japanese
Yen, with small
losses against the
British Pound and
Swiss Franc.
– hopefully next year – but it
will not be a sharp swing back
to growth by any stretch of the
imagination. Even when the
European industry is back to ‘full
health’ growth in construction
output is likely to be weaker than
anywhere else in the world (with
the possible exception of Japan)
for the foreseeable future.
European
contractors
in
particular, are going to have to
continue to internationalise if
they want buoyant markets.
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