Market environment

Weak building construction industry and geopolitical tensions

In November 2024, the construction market research network Euroconstruct forecasted a decrease in building construction for Europe in full-year 2024 of -3.3%, slightly less negative than the previous estimation made in June 2024 (-4.0%). At -6.1%, new construction showed a sharper decline than renovations (-1.2%) in the latest forecast. The decline was primarily due to residential construction (-4.8%), with non-residential construction remaining relatively stable. Most of the countries that are important to Geberit in terms of sales developed negatively to significantly negatively in 2024: the Netherlands -2.6%, Germany -3.7%, Denmark -3.8%, Austria -5.5%, France -5.7%, Finland -5.9%, Norway -6.2%, Italy -6.4% and Sweden -8.6%. Only the Iberian Peninsula recorded positive growth (Spain +1.8%, Portugal +1.2%), while Switzerland saw a stable development (+0.3%).

Of the total European construction volume of EUR 2,211 billion in 2024, around 80% was generated by building construction. The ratio of residential to non-residential building construction remained unchanged at around 60% to 40%. New construction as a share of total building construction continued to lag behind the renovation business in 2024.

According to estimates by the Bureau of Economic Analysis, real gross domestic product (GDP) increased by +2.8% in the USA (previous year +2.9%), while inflation declined to +2.9% (previous year +3.4%) according to the Bureau of Labor Statistics. Investments in building construction increased by +4.6% compared to the previous year according to figures from the United States Census Bureau. Within building construction, investments in residential construction increased by +6.1% and in non-residential construction by +3.9%. In the healthcare/hospitals and schools/universities segments, which are important for Geberit, growth turning negative and slowed considerably, respectively, with -1.8% and +4.5% compared to the previous year (+12.5% and +19.1%, respectively).

In the Far East/Pacific region, economic growth amounted to +4.1% in the reporting year, above the global economic development of +2.7%. With a share of around 51%, the largest proportion of global economic growth again originated from the Far East/Pacific region. China recorded slightly weaker growth compared to the previous year, with the real estate crisis again having a negative impact on residential construction in 2024.

In the Middle East/Africa region, economic growth in 2024 was +2.4% – the same as the previous year.

(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 2024 edition of the IMF World Economic Outlook)