Analysis of the financial performance of Europe’s biggest construction and house building companies has revealed that the UK has just one listing within the European Top 10, with Balfour Beatty listed sixth. The infrastructure group leads the UK market ahead of companies such as Carillion and Laing O'Rourke, the UK’s second and third largest construction companies, which were listed in 12th and 15th positions in the European Top 100. The ‘European Powers of Construction 2009’, a report from Deloitte, presents an annual ranking of the 100 largest European construction companies by revenue, and offers insights into a challenging economic environment for the industry.
2009 has been marked by recession and the construction sector has been one of the hardest hit. Government spending has assisted the prevention of a more serious downturn in the sector to date, but with a significant fall in private sector demand and predicted Government cut backs in their capital budgets to come, trading during the recession is tough and will remain competitive in 2010 and beyond.The full effects of the recession have probably not been reflected in the listing below as order backlog was high at the start of the downturn and, with the exception of the house building sector, the industry lags other sectors. Overall, 45 companies reported construction growth during the year, compared to 75 companies for the same period last year. Negative growth in the year was dominated by companies specialising in the house building sector.
Despite only having one company in the top 10, the UK continues to dominate the top 100 survey, accounting for 27 of the top 100 places.French company VINCI continues to lead the pack – topping the 100 largest European construction companies with FY08 construction revenues of over €30bn. France dominates the top 10 in terms of construction revenue, with three companies listed, followed by Germany which has two. No other country has more than one company in the top 10.
However, sector activity is diverse and when the same companies are ranked by total income the Spanish companies come more to the fore. The impact of this trend sees four Spanish construction companies leap into the top 10, including ACS Group, Grupo Ferrovial and Acciona, pushing Balfour Beatty to 11th. Other companies such as Grupo Isolux-Corsán of Spain; ENKA Insaat ve Sanayi of Turkey; and Interserve in the UK, climb significantly in the ranking by engaging in a wide range of activity in addition to construction.
As a result of the economic downturn, Deloitte expects that construction sector growth in the UK will be largely dependent upon new public sector work and infrastructure spending