Residential construction is stumbling but still standing.
Meanwhile, non-residential construction is reaching for the sky in the US while Europe lags behind.
Easing input prices are being somewhat offset by wage pressures but profitability remains solid.
Liquidity remains the issue for smaller players as insolvencies pick up in the sector. The construction sector is mainly composed of SMEs that face a longer cash-conversion cycle. These companies have been quite exposed to rising input costs and financing issues amid rising interest rates and tightening financial conditions.
As they are facing liquidity issues, an increasing number of construction firms in Western Europe are becoming insolvent, contributing to more than 20% of the national insolvency count when combining cases in pure construction and real estate activities in Germany, France, the UK and Italy.
Read the full article (in French): https://www.allianz-trade.com/en_global/news-insights/economic-insights/glogal-construction-outlook.html
