Market environment
Market environment still impacted by COVID-19
The construction sector developed positively in most regions in 2021. COVID-19-related catch-up effects largely led to pleasing growth figures in the market environment.
In November 2021, the construction market research network Euroconstruct forecasted an increase in building construction for Europe in 2021 of 5.8%, much higher than the previous estimation made in mid-2021 (+3.8%). At 5.4%, new construction is seen by the forecast as growing slightly less strongly than renovations (+6.2%). Non-residential construction (+3.7%) recorded weaker growth than residential construction (+7.1%). According to Euroconstruct, countries that are important to Geberit in terms of sales developed very positively in 2021 – depending on the degree of pandemic impact in the previous year: Italy +16.3%, United Kingdom +12.5%, Belgium +10.8%, Sweden +9.2%, France +7.0%, Denmark +5.7%, Austria +5.3%, the Netherlands +2.0% and Switzerland +2.0%. Of the most important countries, only Germany showed a slight decrease in growth at -0.5%. According to the figures in the October 2021 edition of the IMF World Economic Outlook, a significant share (around 20%) of the global recovery in economic performance originated in Europe, with a GDP growth rate of +5.2%.
Construction output and Geberit net sales in Europe
2017–2021
(Index 2016 = 100)
Of the total European construction volume of EUR 1,740 billion in 2021, around 80% was generated by building construction. The ratio of residential to non-residential building construction remained the same at around 60 to 40 percent. New construction as a share of total building construction continued to lag behind the renovation business in 2021.
Total construction output Europe
2021
(EUR 1,740 billion)
According to estimates by the Bureau of Economic Analysis, gross domestic product (GDP) increased by 5.7% in the US (previous year -3.4%). Investments in building construction increased by 10.0% according to figures from the United States Census Bureau. Within building construction, investments in residential construction increased by +22.9%. In contrast, investments in non-residential construction decreased by 4.7% (previous year +1.9%). The healthcare/hospitals and schools/universities segments, which are important for Geberit, developed with +1.6% less positively and with -8.7% substantially weaker, respectively, compared to the previous year (+5.6% and -2.0%, respectively).
In the Far East/Pacific region, economic growth amounted to 6.1% in the reporting year, slightly above the global economic development of 5.7%. With a share of around 40% of global growth, the largest proportion of global economic growth once again originated from the Far East/Pacific region. At 8.0%, China grew slightly above the average of recent years and much stronger than in the previous year (+2.3%), although the construction industry grew less strongly compared to the economy as a whole. There was no growth in Tier-1 and Tier-2 cities; in Tier-3 and Tier-4 cities, the market actually saw a decline and prices dropped.
In the Middle East/Africa region, economic growth in 2021 was 4.4%, well above the average of recent years and considerably above that of the previous year (-3.8%).
(The aforementioned figures covering the world economy and the performance of the Far East/Pacific and Middle East/Africa regions were published in the October 2021 edition of the IMF World Economic Outlook)