Construction statistics - NACE Rev. 2
From Statistics Explained
- Data from April 2013, most recent data: Further Eurostat information, Main tables and Database
Main statistical findings
The financial and economic crisis had a major impact on the construction sector in nearly all EU Member States. Output and employment fell sharply in many countries, particularly in Spain and the Baltic Member States. Between February 2008 and December 2010 the EU-27’s seasonally adjusted production index for construction fell by more than one fifth (-22.1 %) underlining both the length and severity of the downturn in this activity. During the first three months of 2011 there were modest signs of a recovery, although during the remaining nine months of the year there was no sign of further sustained growth, as output remained relatively stable. In February 2012, the level of output for construction fell further, falling to a new low below its level during the financial and economic crisis (at the end of 2010), before stabilising again from May 2012 onwards. The considerable changes in market conditions for the construction sector since 2008 should be borne in mind when considering the data presented in this article which relates to the situation in 2010.
The EU-27’s construction sector (Section F) was made up of 3.3 million enterprises in 2010, employing 13.4 million persons and generating EUR 496.1 billion of value added. As such, the construction sector accounted for 15.1 % of all the enterprises in the non-financial business economy (Sections B to J and L to N and Division 95), employed 10.1 % of its workforce, and generated 8.4 % of its value added. The construction sector can be characterised as having enterprises that are, on average, smaller than the non-financial business economy average both in terms of their employment levels or their added value.
The share of personnel costs in operating expenditure (personnel costs plus purchases of goods and services) was 23.9 % in the EU-27’s construction sector in 2010, above the non-financial business economy average of 16.4 %, underlining the importance of labour input in the construction activity as a whole. A number of construction activities (at a more detailed level) are also relatively capital-intensive, for example, the construction of roads and railways (Group 42.1) or the development of building projects (Group 41.1).
Apparent labour productivity in the EU-27’s construction sector in 2010 was EUR 37.0 thousand per person employed and average personnel costs were EUR 31.4 thousand per employee. While apparent labour productivity was below the average for the non-financial business economy (EUR 44.8 thousand per person employed), average personnel costs per employee were higher. The relatively low level of the apparent labour productivity is all the more notable given the small proportion of part-time employment within the construction sector: part-time employment has the effect of making this ratio lower as this productivity measure is calculated on a per head basis. The wage-adjusted labour productivity ratio combines the ratios for apparent labour productivity and average personnel costs and is less affected by the issue of part-time employment and so facilitates analysis between activities. This ratio is also adjusted for the relative importance of unpaid working proprietors and family workers — which is higher in the construction sector (21.6 %) than in the non-financial business economy as a whole (14.3 %). The wage-adjusted labour productivity ratio shows that value added per person employed in the EU-27’s construction sector in 2010 was equivalent to 117.7 % of the average personnel costs per employee, well below the average for the whole of the non-financial business economy (144.8 %); indeed, this was the lowest value for this indicator across any of the NACE sections that make-up the non-financial business economy.
Unlike for productivity indicators, the gross operating rate (the relation between the gross operating surplus and turnover) of the construction sector in the EU-27 in 2010 was above the average for the non-financial business economy, reaching 10.7 % compared with 10.1 %. This is partly an effect of the relatively high share of self-employment in construction, as working owners and other unpaid persons contribute to the value added but are recompensed through a share of profits (not in the form of personnel costs), so boosting the gross operating surplus.
There were 2.3 million enterprises in the EU-27’s specialised construction activities subsector (Division 43) in 2010, seven tenths (70.1 %) of all construction enterprises. Around 880 thousand enterprises or 26.8 % of the construction total, were classified to the construction of buildings subsector (Division 41) and the rest (100 thousand or 3.1 %) were in the civil engineering subsector (Division 42).
On average, civil engineering enterprises in the EU-27 in 2010 were considerably larger than other construction enterprises, due in part to the large-scale investment that is often required in plant and machinery for this subsector. The civil engineering share of construction employment was 12.1 % and its value added share reached 14.6 % compared with the above mentioned 3.1 % share in the number of construction enterprises. The construction of buildings subsector also accounted for a larger proportion of construction employment (29.4 %) and value added (30.4 %) than its share of the total number of construction enterprises (26.8 ). Although the specialised construction activities subsector accounted for a smaller share of employment (58.5 %) and value added (55.0 %) than its comparative share based simply on the number of enterprises, it was nevertheless the largest subsector according to both of these measures and contributed more than half of the construction total for both variables.
EU-27 apparent labour productivity in 2010 ranged from EUR 34.8 thousand per person employed in the specialised construction activities subsector to EUR 44.3 thousand per person employed for civil engineering, the latter being just below the non-financial business economy average (EUR 44.8 thousand per person employed). Average personnel costs ranged from EUR 29.1 thousand per employee for the construction of buildings, which was below the non-financial business economy average (EUR 30.9 thousand per employee), to EUR 33.4 thousand per employee for civil engineering. As already noted, the wage-adjusted labour productivity ratio for the construction sector was the lowest among any of the NACE sections that compose the non-financial business economy: this was in large part due to the particularly low ratio (108 %) for the specialised construction activities subsector. Indeed, this subsector posted the third lowest wage-adjusted labour productivity ratio in 2010 for the EU-27 across all of the NACE divisions covered by the non-financial business economy. The wage-adjusted labour productivity ratios for building (132 %) and for civil engineering (133 %) were also below the EU-27 non-financial business economy average (144.8 %).
In value added terms, France and the United Kingdom had the largest construction sectors in the EU in 2010, the former accounting for a 17.2 % share of the EU-27 total, while the United Kingdom’s share was 15.9 %. As such, the relative contribution of France and the United Kingdom to EU-27 value added in the construction sector was somewhat higher than their contribution to the non-financial business economy as a whole; the same was true for Italy and Spain, while Germany’s contribution to EU-27 value added in the construction sector (13.6 %) was considerably less than its corresponding share of the value added generated in the EU-27’s non-financial business economy (21.9 %). In value added terms, Spain had the largest subsector for the construction of buildings (22.0 % of the EU-27 total in 2010); the United Kingdom had the largest civil engineering subsector (20.0 %); and France the largest subsector for specialised construction activities (23.8 %).
The construction sector contributed 17.4 % of total added value in the Cypriot non-financial business economy in 2010, making this the most specialised EU Member State in value added terms; the next highest shares were 13.2 % in Spain and 11.0 % in Portugal. The least specialised Member State, in value added terms, was Ireland as the construction sector contributed just 3.7 % of non-financial business economy value added, which was less than half the EU-27 average (9.4 %); Germany and Hungary were the next least specialised Member States in the construction sector. In employment terms, Cyprus remained near the top of the ranking, as construction occupied 14.8 % % of the non-financial business economy workforce; however, Luxembourg reported a higher share (17.0 %).
Productivity in the EU Member States can be compared using the wage-adjusted labour productivity ratio which shows the relative level of value added per person employed compared with average personnel costs per employee, in other words the average value of output compared with the average cost of personnel input. Romania and Bulgaria had, by far, the lowest average personnel costs in the construction sector in 2010 and this was reflected in their relatively high wage-adjusted labour productivity ratios (237.8 % and 175.1 % respectively). Cyprus recorded relatively high apparent labour productivity combined with average personnel costs per employee below the EU-27 average resulting in the third highest wage-adjusted labour productivity ratio (173.2 %), ahead of the United Kingdom (which recorded the highest level of apparent labour productivity within the construction sector). The lowest wage-adjusted labour productivity ratio was recorded in Greece (75.1 %, 2009 data). As such, average personnel costs per employee were not covered by the added value generated by each person employed in the Greek construction sector in 2010. The next lowest wage-adjusted labour productivity ratio in this sector was 104.0 % in Italy.
Size class analysis
Most construction enterprises serve a local market and consequently the enterprise size structure of the construction sector is characterised by a large number of quite small enterprises and relatively few large ones. Micro and small enterprises (employing fewer than 50 persons) together employed 73.6 % of the EU-27’s workforce in the construction sector in 2010, a higher share than nearly all of the NACE sections in the non-financial business economy: the average for the non-financial business economy was 50.4 %. Large enterprises (employing more than 250 persons) provided employment for one eighth of the EU-27’s workforce (12.0 %) in construction, compared with a non-financial business economy average of one third (32.5 %). Most EU Member States displayed a similar pattern, as in 2010 the combination of micro and small enterprises employed a majority of the construction sector’s workforce in all Member States. The largest contribution from large enterprises was 21.6 % of the workforce in the United Kingdom.
The particularly high share of the construction workforce in micro and small enterprises was elevated by the specialised construction activities subsector, as here 83.1 % of those employed in the EU-27 workforce were employed by micro or small enterprises in 2010 and just 7.0 % in large enterprises. By contrast, in the civil engineering subsector the combined share of micro and small enterprises was a 33.3 % share of the EU-27 workforce, while the share of large enterprises reached 37.9 %. In terms of value added, large civil engineering enterprises contributed an even greater share of the subsector’s total, reaching 41.5 %, compared with 17.7 % for the whole of construction.
The northern Italian region of Lombardia (including the city of Milan) and the French capital city region of the Île de France recorded the highest number of persons employed in 2010 in the construction sector, across the NUTS level 2 regions of the EU. In Lombardia, the construction workforce was 342.2 thousand strong, while in the Île de France it numbered 328.4 thousand persons, which represented close to 3 % of the EU-27 total in both cases. The regions with the next largest construction workforces were Cataluña, Andalucía and Comunidad de Madrid in Spain, all with more than 200 thousand persons employed. Overall, the top 20 list was dominated by Italian regions of which there were eight, accompanied by four regions each from Spain and France, two from Poland, as well as one each from the Netherlands and Portugal. These top 20 regions together accounted for 31 % of the EU-27’s construction workforce. Among the six EU Member States with at least one region in the top 20, the capital city region did not figure for two countries: the Dutch capital city region of Noord-Holland had the 48th largest construction workforce among the EU regions while the Portuguese region of Lisboa had the 23rd largest construction workforce. As well as four capital city regions, the top 20 contained many other regions with major cities such as the regions containing Barcelona, Seville, Valencia, Lyons, Marseille, Milan, Turin, Venice and Rotterdam. The vast majority of the top 20 regions can be described as being located in southern Europe, with the notable exceptions of the Polish and Dutch regions, as well as the more northerly French regions.
The relative importance of the construction sector can be analysed by comparing the employment of this sector with the non-financial business economy workforce. Among the 188 NUTS level 2 regions for which data are available in 2010, the median share of the construction sector in the non-financial business economy workforce was 11.2 %. Employment within the construction sector was quite widespread, although at the top end of the ranking there were a number of regions where a particularly high share of non-financial business economy employment was in the construction sector: in 12 of the 188 regions for which data are available, the construction sector accounted for more than 16.8 % of the non-financial business economy workforce, in other words 50 % more than the median. Half of these 12 regions were in France, mainly in the south and centre of the country and notably including the island of Corse where the share peaked at 24.5 %. The remaining six regions were shared between Italy (Molise and Valle d’Aosta/Vallée d’Aoste), central Spain (Extremadura and Castilla-La Mancha) and the Portuguese islands of Madeira and the Azores. There were few regions that were particularly unspecialised in the construction sector in employment terms. The two Irish regions and the British capital city region recorded the lowest shares, with the construction sector employing less than 5.5 % of their non-financial business economy workforces.
Data sources and availability
This article presents an overview of statistics for the construction sector in the EU, as covered by NACE Rev. 2 Section F. The NACE classification distinguishes between two general types of construction activity — construction of buildings (Division 41) and civil engineering (Division 42) —and a collection of specialised activities (Division 43). These three NACE divisions are:
- construction of buildings (Division 41);
- civil engineering (Division 42);
- specialist activities (Division 43), such as:
- site preparation (including demolition and earth moving),
- installation activities (such as, installation of electrical wiring and fittings, heating systems, plumbing, elevators and insulation),
- completion and finishing activities (such as, plastering, joinery, flooring, glazing or painting),
- other specialist activities, such as, roofing, pile driving, scaffolding.
Some technical activities related to the construction sector, although not formally part of it, such as architectural services, are classified as business services (see article on professional, scientific and technical activity statistics). Some providers of real estate services are closely related to construction and these services are covered in the article on real estate activity statistics.
The analysis presented in this article is based on the main dataset for structural business statistics (SBS), size class data and regional data, all of which are published annually.
The main series provides information for each EU Member State as well as a number of non-member countries at a detailed level according to the activity classification NACE. Data are available for a wide range of variables.
In structural business statistics, size classes are generally defined by the number of persons employed. A limited set of the standard structural business statistics variables (for example, the number of enterprises, turnover, persons employed and value added) are analysed by size class, mostly down to the three-digit (group) level of NACE. The main size classes used in this article for presenting the results are:
- small and medium-sized enterprises (SMEs): with 1 to 249 persons employed, further divided into;
- micro enterprises: with less than 10 persons employed;
- small enterprises: with 10 to 49 persons employed;
- medium-sized enterprises: with 50 to 249 persons employed;
- large enterprises: with 250 or more persons employed.
Regional SBS data are available at NUTS levels 1 and 2 for most of the EU Member States, Norway and Croatia, mostly down to the two-digit (division) level of NACE. The main variable analysed in this article is the number of persons employed. The type of statistical unit used for regional SBS data is normally the local unit, which is an enterprise or part of an enterprise situated in a geographically identified place. Local units are classified into sectors (by NACE) normally according to their own main activity, but in some EU Member States the activity code is assigned on the basis of the principal activity of the enterprise to which the local unit belongs. The main SBS data series are presented at national level only, and for this national data the statistical unit is the enterprise. It is possible for the principal activity of a local unit to differ from that of the enterprise to which it belongs. Hence, national SBS data from the main series are not necessarily directly comparable with national aggregates compiled from regional SBS.
Construction activity and construction products (structures) have a number of specific characteristics that differentiate them from many areas of the economy. One of the most important of these is that the final product in construction is one of only a few non-transportable goods, as well as being one of the most durable of human artefacts, forming the physical infrastructure where people live and work. Many construction projects are one-off designs and, furthermore, the time scale for many projects from conception to completion is typically longer than in many other sectors, and may run to several years.
Public procurement is especially important for construction as the public sector is a major purchaser of buildings and particularly civil engineering works. Construction is one of the most geographically dispersed activities with marked regional differences in styles of architecture, building materials and techniques. Construction plays a very important economic role in some regions, particularly those associated with tourism, those that are transport and communication hubs, or cultural and sporting centres. Construction is also a highly heterogeneous activity depending on a large number of different specialists. The structure of the construction sector can be viewed as a pyramid, with project coordinating enterprises at the top, subcontracting out work to smaller, specialised enterprises in lower tiers.
In many of the EU Member States, construction activity is seasonal as it is often conducted in the open air or in unfinished structures without heating or air conditioning. Over a longer time period, construction is often sensitive to the overall economic cycle. As a provider of tangible assets it typically leads overall economic movements, although this has not been the case following the recent financial and economic crisis where the downturn in construction activity has continued for much longer than in a range of other activities.
One issue that has gained greater visibility in recent years has been the energy efficiency of structures and the sustainability of construction methods. In 2010, the recast energy performance of buildings Directive was adopted (replacing a 2002 directive on the same subject) in order to strengthen the energy performance requirements of the original directive and to clarify and streamline some of its provisions. Under the new directive, the EU Member States must apply minimum requirements as regards the energy performance of new and existing buildings, ensure the certification of their energy performance, and require the regular inspection of boilers and air conditioning systems in buildings.
In 2011, the construction products Regulation replaced the construction products Directive that was passed in 1989. This regulation lays down harmonised conditions for the marketing of construction products and forms the central part of the EU’s legislation for a single market in the construction sector. In a similar vein, a Commission Recommendation on Eurocodes was adopted in December 2003 to promote the use of harmonised methods for calculating the strength of structural construction products. The full set of Eurocodes were published in 2006 and cover 10 design areas: the basis of structural design, actions on structures, steel, concrete, composite steel and concrete, timber, masonry and aluminium structures, as well as geotechnical design and seismic design.
Further Eurostat information
- European business - facts and figures (online publication)
- Key figures on European Business – with a special feature section on SMEs – 2011 edition
- SBS - industry and construction (sbs_ind_co)
- Annual detailed enterprise statistics - industry and construction (sbs_na_ind)
- Annual detailed enterprise statistics for construction (NACE Rev.2 F) (sbs_na_con_r2)
- Preliminary results on industry and construction, main indicators (NACE Rev.2) (sbs_na_r2preli)
- SMEs - Annual enterprise statistics broken down by size classes - industry and construction (sbs_sc_ind)
- Construction broken down by employment size classes (NACE Rev.2 F) (sbs_sc_con_r2)
- Annual detailed enterprise statistics - industry and construction (sbs_na_ind)
- SBS - regional data - all activities (sbs_r)
- SBS data by NUTS 2 regions and NACE Rev.2, from 2008 onwards (sbs_r_nuts06_r2)
Source data for tables and figures (MS Excel)
- Decision 1578/2007/EC of 11 December 2007 on the Community Statistical Programme 2008 to 2012
- Regulation 295/2008 of 11 March 2008 concerning structural business statistics
- Joint research centre, see:
More detailed analysis of construction activities:
Background articles for short-term statistics related to construction: