EMCC dossier on the European construction sector

The full report, Trends and drivers of change in the European construction sector: Mapping report (2 Mb), is available for downloading free of charge.

The construction cluster in northeast England and Finland

These reports profile the construction industry clusters in northeast England and in Finland.

Constructing Excellence in the North-East (CENE)

The regional ‘Constructing Excellence’ initiative is part of a national programme established in February 2004 that addresses the issues and challenges facing the construction sector in northeast England. The initiative aims to achieve change in construction productivity by tackling the market failures in the sector and making the business case for continuous improvement. Through focused programmes in innovation, best-practice knowledge, productivity and engagement, Constructing Excellence has developed a strategy to deliver the process, product and cultural changes that are needed to drive major productivity improvements in the sector.

The report, The construction cluster in northeast England: Constructing Excellence (

240 kb), explores the work undertaken by the initiative, and highlights the experiences of some of the companies and organisations taking part in it.

Construction cluster in Finland

The Finnish construction industry is currently undergoing considerable change. If it is to keep its competitive edge, it must improve in certain areas, such as its skills base, use of information technology (IT), and partnerships based on inclusion. One of its strengths is the involvement of public and semi-public organisations and private-public partnerships. This is an extension of traditional Scandinavian industrial development policy.

The report, The construction cluster in Finland (

572 kb), reviews the industry’s recent development, which - coupled with socio-economic changes - sets the current agenda and the challenges addressed by a cluster working together. It outlines the background for such collaboration, the parties involved, the goals, and how intentions and visions have been turned into action.

Industrial relations

In June 2004, the European Industrial Relations Observatory (EIRO) explored the phenomenon of undeclared work - defined as ‘any paid activities that are lawful as regards their nature but not declared to the public authorities’. It has received increasing attention from the European Union over recent years, and particularly challenges the EU construction sector today.

The EIRO national centres in 23 European countries were asked, in response to a questionnaire, to give a brief overview of the [industrial relations aspects of undeclared work](/search/node/eiro OR thematicfeature8?oldIndex), looking at: the nature and extent of undeclared work; the regulatory framework; the role, activities and views of the social partners; and partnerships between social partners and public authorities to tackle undeclared work.

Labour migration from eastern and central Europe also challenges the social partners of the construction sector, notably in Belgium. Much of this employment is considered to be illegal or performed under arrangements regarded by many as dubious. The social partners in the building sector in Belgium therefore set up an ‘unfair competition’ working party in cooperation with the government to address labour migration and possible abuses.

As a monitoring tool, [EIROnline](/search/node/eiro OR index?oldIndex) offers regular updates and analysis on industrial relations in the [construction sector](/search/node/eiro OR sectors OR 11 OR 2005?oldIndex).

The construction sector of tomorrow

Trends and drivers of change in the European construction sector: Four scenarios

The scenario report, Trends and drivers of change in the European construction sector: Four scenarios, sets out four different scenarios for future developments in the European construction sector over the next decade. A scenario describes a plausible hypothesis about the future and is a tool used in foresight exercises, for policy analyses and policy formulation, and for strategy processes in private companies and among social partners.

The scenarios presented build on a conceptual framework designed to capture changes in the external environment of service provision by means of five categories of drivers and trends: socio-cultural; economic; political; technical; ecological. These trends and drivers were then consolidated and assessed within a team of scenario and sector experts according to four criteria:

• importance, i.e. importance: low, medium, high;

• certainty, i.e. likelihood of occurrence: low, medium, high;

• controllability, i.e. ability to manage: low, medium, high;

• significance, global and European: yes or no.

Using assessments of around 50 trends and drivers, two dimensions were chosen to form the main structure of the four scenarios for the construction sector:

1. labour market flexibility;

2. implementation of information and communication technologies (ICT).

The scenarios then analyse the plausible implications that these macro drivers may have for companies and in relation to those issues that companies must address in the future, such as business strategy, work organisation, and skills, education and training.

Figure 1: Schematic outline of the four scenarios

Source: EMCC, Trends and drivers of change in the EU construction sector: Four scenarios, 2005, p. 5

The full report, Trends and drivers of change in the European construction sector: Four scenarios (298 kb), is available for downloading free of charge.

EMCC company case studies in the construction sector

The case of the social partners in Denmark and the five company case studies highlight the scale and scope of the European construction industry. They illustrate how these establishments, in different segments of the sector, are developing strategies to adapt to the evolving global competitive and regulatory environment, while trying to meet consumer demands for value and capability.

Each case study begins with a company profile, followed by an analysis of the market dynamics and changes within the company and the workforce, and concludes with the company’s investment in education and training, research and development, and new technologies.

The case studies are downloadable free of charge as pdf files by clicking on the company’s name below.

• Social partners in the Danish construction industry (

95 kb) highlights the major challenges and opportunities for the Danish construction industry from the viewpoint of the social partners. The case is centred on two themes that are the main drivers of change in the industry: new ways of planning, coordinating and carrying out work at construction sites; and the current role of the ‘grey (labour) market’ and its implications for the Danish construction sector.* Grupo Dragados S.A. (

213 kb) merged with Actividades de Construcción y Servicios S.A. (ACS,) in 2003, creating the largest construction company in Spain and the third biggest in Europe. The ACS/Dragados group embraces three related business areas: industrial services; services and concessions; and construction. The latter is the company’s most important activity and thus the subject of this case study.* ECISA (

183 kb) is a family-owned construction company, with its main office in Alicante, Spain, and subsidiary offices in Valencia. Most of the company’s projects are in the Valencia region, so ECISA calls itself a regional construction company. The company emphasises its strengths as a serious and professional business partner with a focus on innovation and social commitment.* Torkret AG (

92 kb) started in 1919 when it developed a patented concrete spraying (shotcrete) machine in Germany. In order to maintain its competitiveness, the company sold its spraying machine production part to Riedl and concentrated on providing concrete repair and maintenance services. Today, Torkret provides complex technical services in building repair, strengthening, and maintenance.* Hifab AB (

79 kb) is an independent project management company, the leader in its field in the Swedish housing and civil construction sector. It was founded in 1947 and its history is rooted in the construction industry. The company operates throughout Sweden and participates in projects worldwide - many of them development projects in the fields of infrastructure, rural development, environmental engineering, geotechnology, procurement, institutional development, education, social development, and health care.* McLoughlin and Son Decorators (

67 kb) is family-owned, employing 40 people. The company is located in Ballincollig, a small town outside Cork in the Republic of Ireland, and provides a wide range of decorating services to various customers, including building contractors, pharmaceutical and high-tech companies, government departments, apartment and commercial developments, and the domestic decoration market. The company serves mainly the local market in Cork and neighbouring towns.

Company restructuring in the sector

The European Restructuring Monitor (ERM) provides an overview of restructuring activities and employment effects in Europe, including the construction sector. All information is based on the analysis of daily newspapers and the business press in the EU25 and the two acceding countries, Bulgaria and Romania. The data gathered are presented in concise [online fact sheets](/search/node/emcc OR erm OR index.php?oldIndex), which can be searched and sorted by different criteria - for example, by country, company or type of restructuring.

In addition, the autumn 2005 issue of the ERM quarterly will present a sector focus on construction, including an overview of restructuring cases for the period from July to September 2005.

Further relevant information sources

EMCC also highlights [further information sources](/search/node/emcc OR indexes OR sector OR construction OR and OR woodworking?oldIndex) looking at the construction sector, providing a brief summary and access details.