Contents. Preface. Economic and construction figures per country 10. Sustainability in the construction sector

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2 Contents 1 Preface 3 12 Key Forecast finding overview 35 3 Economic and construction figures per country 10 4 Sustainability in the construction sector 27 5 Appendix 77 2

3 Preface The added value of the European Architectural Barometer For decision makers charged with considering company resources, staffing and marketing strategy, a clear insight into future construction volumes is essential. Economic indicators however seldom provide an adequate picture of these volumes. Therefore Arch-Vision combines economic indicators with the architects expectations in order to give insight in these volumes. In addition a current theme is investigated every quarter to determine trends and developments within the construction sector. That is why this report is a must have for each construction marketeer. Every quarter we ask our clients for input about the specific topics we cover. This quarter Arch-Vision would like to thank the following clients who actively participated in the discussion about the topics covered in this survey and contributed suggestions for the questionnaire and the report: Preface Q report Armstrong Ceilings Forbo Flooring Icopal Lafarge Holcim Vaillant This report is the Q edition of the European Architectural Barometer in which architects provide a strong indication of the developments in the construction sector. Next to the economic developments and the forecasts for the next few years this report also gives you insights in the topic sustainability in construction. Throughout 2017 the positivity in the European construction sector that was already seen in 2016 continued to develop positively. After a small setback in the first quarter of 2017, the expected growth figures are now back on 2016 levels. The German construction sector is still showing steady figures and also the Netherlands have a very positive outlook. Only Italy still shows volatile figures and it remains uncertain if and when a small growth finally will be established. Indicators in the British construction sector remain stable, and it seems that a fear for a set-back due to Brexit isn t yet felt in the construction industry. Theme part sustainability in construction This quarter architects were asked to what extent sustainability is taken into account in their projects. In general it seems that sustainability in construction is evolving from using sustainable materials to creating sustainable buildings. Also the willingness to invest in sustainable construction is growing over time, although still a large number of investors isn t still willing to invest in it. 3

4 Contents 1 Preface 3 12 Key Forecast finding overview 35 3 Economic and construction figures per country 10 4 Sustainability in the construction sector 27 5 Appendix 77 4

5 Forecasts 5

6 Forecasts Forecast: Future building volumes in total, newly build and renovation % 8.0% 5.5% 2.4% -2.2% 2.5% 2.6% 2.2% 3.0% 3.4% Throughout recent years the Polish construction sector showed a very positive development. Indicators for Poland are still positive, and the set back we saw in Q1 regarding the development of the order book has been undone in Q2 and Q3. Nevertheless, the positive indicators and the positive sentiment among architects still lead to the prediction that the Polish construction sector will grow, although a (temporary?) set-back in non-residential building permits for Poland should be monitored closely. For the coming years Arch-Vision expects positive figures in Poland. Figures ( ) based on 2013 published figures of Euroconstruct See the appendix for forecasts split by residential and non-residential. In the appendix you can also find an explanation of the icons. Amounts in billions at 2013 prices 6

7 Contents 1 Preface 3 12 Key Forecast finding overview 35 3 Economic and construction figures per country 10 4 Sustainability in the construction sector 27 5 Appendix 77 7

8 Economic and construction figures Polish construction sector expected to keep growing, but permits should be monitored closely Throughout recent years the Polish construction sector showed a very positive development. Indicators for Poland are still positive, and the set back we saw in Q1 regarding the development of the order book has been undone in Q2 and shows an even stronger development in the third quarter of A slightly worrying image for Poland is the development of the non-residential building permits. They show a set-back for two quarters in a row which could lead to a slowdown of the Polish construction industry in coming years. For the coming years Arch-Vision expects the Polish construction sector to grow 3.8% (2017), 3.0% (2018) and 3.4% (2019). Expecting empty order book in 12 months Development of order book 60% 100% 75 50% 80% 60% 40% 40% 25 30% 20% 0% 20% -20% 10% -40% -25 0% Q1 '13 Q3 '13 Q1 '14 Q1 '16 Q3 '15 Q1 '15 Q3 '14 Building volumes Q3 '16 Q1 '17 Q3 '17-60% -80% -100% Q1 '13 Q3 '13 Q1 '14 Q3 '14 Q1 '15 Q3 '15 Q1 '16 Q3 '16 Q1 '17 Q3 ' % 8.0% 5.5% 2.4% -2.2% 2.6% 2.6% 3.8% 3.0% 3.4% Based Based on previous on previous quarter quarter Based Based on Q4 on 2008 Q Increase Increase of more of more than 5% than 5% Increase Increase of 0-5% of 0-5% Rolling Rolling Order Order book book Barometer Barometer Remains Remains the same the same (0%) (0%) Decrease Decrease of 0-5% of 0-5% Decrease Decrease of more of more than 5% than 5% 8

9 Economic and construction figures Non-residential building permits show negative development for second quarter in a row Developments Italy Poland is a country which heavily relies on new build with respect to the construction sector volumes (almost 17575% of its total volumes). Therefore the trend in building permits should be watched closely. The drop of permits in 2014 will have some effect on the growth figures of this year, but for the coming years the future of the sector looks bright. Increasing permits as well as positive indicators in general. Although it should be noted that the non-residential permits show a dip for the second quarter in a row which could be an important indicator to keep an eye on in the next quarters. The Polish economy is slightly recovering, and that can be seen in the improving confidence indicators. Just as in 2016 the confidence indicators keep showing growth again, although they remain negative. The number of architects experiencing postponed or cancelled projects are stable since the beginning of Q1 '09 Q2 '09 Q3 '09 Q4 '09 Q1 '10 Q2 '10 Q3 '10 Q4 '10 Q1 '11 Q2 '11 Q3 '11 Q4 ' Q2 '12 Q1 '09 Q1 '12 Q1 '10 Q3 '12 Development building permits Q4 '12 Q1 Q1 '13 '11 Q1 '12 Q2 '13 Q1 '13 Building permits - Residential Building permits - Non residential Economic and construction related indicators Value Q Value Q Current value Q Q1 '14 Q1 '15 Q1 '16 Q1 '17 Index: 2010=100 Quarterly development GDP (quarterly growth rate) (%)* (Q3-Q2) Consumer confidence indicator** Industrial confidence indicator** Construction confidence indicator** Production value buildings (index 2010=100)** Architect with postponed projects (%)*** Architect with cancelled projects (%)*** Building permits residential (index 2010=100)** Na (Q3-Q2) Building permits non-residential (index 2010=100)** Na (Q3-Q2) Source: *Country statistical office; ** Eurostat, *** Arch-Vision 9

10 Contents 1 Preface 3 12 Key Summary finding and forecasts 35 3 Economic and construction figures per country 10 4 Sustainability in the construction sector 27 5 Appendix 55 10

11 Sustainability: Introduction Each quarter the European Architectural Barometer Report focuses on a different topic that plays an important role for architects in Europe. In Q the focus was on sustainability. Sustainability is partly integrated in the construction industry, but it comes in many forms and is interpreted in different ways. This quarter architects were asked about this sustainability in the sector to see how they look at the development of and place that sustainability takes in the sector. This subject was surveyed by Arch-Vision in Q3 2013, 2014 and 2015 as well, but this quarter there were some changes in the questionnaire. If possible and relevant, comparisons are made with the results in The following questions will be answered in this chapter: What is the understanding of sustainability (to which characteristics is it linked)? To what extent sustainability is asked for and used (types of projects, willingness to invest)? What is the most important building component for sustainable buildings? Which actors are most actively involved and committed to sustainability? What kind of sustainability certificates are most valued? Which manufacturers are most dedicated to sustainability? What is the opinion of architects towards sustainability in the construction sector? On the following pages the results will be presented, starting with the key findings. In that way a first impression of the eight Arch-Vision countries in Europe regarding sustainability can be obtained. In the rest of the chapter the topic will be elaborated in more detail. 11

12 Sustainability: Characteristics Sustainability is becoming more focused on the end-user and the living environment of the end-user In all countries architects link sustainability with using environmental friendly products or solutions as well as with creating buildings that have a positive influence on health and wellbeing. This means that the definition of sustainability is changing. Besides using environmental friendly products or solutions the focus is becoming more on creating buildings that have a positive influence on the health and wellbeing of the end-user and the living environment of the end-user. What is sustainability according to architects in 2017? Environmental friendly products or solutions Creating buildings that have a positive influence on health and wellbeing Both are equally applicable 4% 18% 69% 12

13 Sustainability: Demand for sustainability In Belgium half of the principals are asking for sustainability and are also willing to invest more, a large increase in two years time. In Poland the number of principals who don t ask for sustainable materials/buildings remains the same. Demand for sustainability and reasons (not) to invest Belgium Poland Asked for and willing to invest more Not asked for and not willing to invest more Asked for and not willing to invest more Don't know Questions 2017 and 2015 slightly differ Arch-Vision, October 2015 Asked and more investment because long term pay offs Asked and more investment, clients understand the benefit Asked, but principal is not willing to invest more Not asked for Don't know Arch-Vision, October 2015 Reasons not to invest (Top 5) Reasons to invest (Top 5) Reasons not to invest (Top 5) Reasons to invest (Top 5) Costs are too high 62% Economical benefits 50% Lack of knowledge 44% Forced by regulations 25% More time consuming 2% Energy efficiency of buildings 22% Lack of interest Design too complex 2% 1% To receive certifications of buildings High return on investments 19% 11%

14 Sustainability: Demand of principals In Poland only 36% of the principals ask for sustainability Demand and implementation sustainability within each segment Belgium Poland Sustainability asked for by principal per segment New-build 15% Renovation 11% Residential 13% Non-residential 14% Sustainability actually taken into account New-build 51% Renovation 32% Residential 42% Non-residential 42% Note: % of projects per segment where principals ask for sustainable materials/buildings and the % of projects per segment where sustainability is actually taken into account 14

15 Sustainability: Expected increase In Poland an increase in the demand for sustainability is mainly expected in new-build projects Expected increase per segment Belgium Demand for sustainable buildings/materials will Poland Demand for sustainable buildings/materials will Strongly increase Increase Stay the same Decrease Strongly decrease Don't know Expectation biggest increase per segment Expectation biggest increase per segment Both equally 35% Don't know 7% Residential projects 34% Non-residential projects 25% Both equally 22% Don't know 4% New build projects 69% Renovation projects 5% 15

16 Sustainability: Most actively involved and committed parties Engineering companies for installations are considered most actively involved and committed to sustainability In most countries engineering companies for installations are considered most actively involved and committed to sustainability. Other important parties are principals, building owners, engineering companies for construction and HVAC installation companies. Parties most actively involved and committed to sustainability Engineering company for installations [calculation energy performances] 11% Principal Engineering company for construction [calculation structural performances] Building owner/ end user 3% 20% 28% HVAC installation company Manufacturer of building and installation materials Main contractor Electrical installation company Architectural firms Sub-contractor [such as flooring contractors, roofing contractors etc.] None Other Don't know 11% 18% 5% 3% 16% 3% 0% 4% 17% 16

17 Sustainability: Building components Insulation most important building component, followed by HVAC installation and the facade of the building In all countries insulation is considered the most important building component for a sustainable building. This was also the case in Other high ranking building components are HVAC installation and the facade and roof of the building. Top 10 Most important building component in order to build a sustainable building in 2017 (% (strongly) agree) Insulation HVAC installation Facade Roofing Lighting Electrical installation Structural construction Ceiling Entrance solutions Flooring 91% 90% 64% 86% 75% 58% 34% 26% 39% 45% 17

18 Sustainability: legislation and certificates In Poland less than one-third of the architects are aware of European legislation about sustainability. Sustainability legislation and certificates Belgium Poland Awareness European legislation Doing more than required by law Awareness European legislation Doing more than required by law No 68% Don't know Don't know 3% Yes No 9% Yes 29% 41% 50% LCA requested LCC requested LCA requested LCC requested (Complete Building Life Cycle Assessment) (Complete Buildings Life Cycle Costing) (Complete Building Life Cycle Assessment) (Complete Buildings Life Cycle Costing) New-build projects 10% New-build projects 12% Renovation projects 8% Renovation projects 6% Usage sustainability certificates Usage sustainability certificates Residential projects 27% Non-residential projects 29% % of architects expecting a(n) (strong) increase in the use of sustainable certificates New-build projects 30% Renovation projects 20% 61% in residential projects 56% in non-residential projects 18

19 Sustainability: Certificates Sustainability certificates for the complete building level are best known and most used in projects In Poland both types of certificates are mostly considered equally important. There are just a few sustainability certificates for the complete building level from which BREEAM, LEED and HQE are best known, but also the most used certificates in projects. Most valued certification % in projects Product certificates* 23% Sustainable certificates** 19% Both equally important 35% *product labels such as Blauer Engel, Cradle to Cradle **LEED, BREEAM Sustainability certificates Best known BRE (BREEAM) 21% LEED 19% None 9% Most used in projects BRE (BREEAM) 7% LEED 4% None 16% Sustainability certificates for the complete building level Energy efficiency certificates for the complete building level 19

20 Sustainability: Manufacturers In five countries Knauf Insulation is seen as a manufacturer most dedicated to sustainability One of the most important reasons for architects to think of a manufacturer as dedicated to sustainability is offering a wide range of sustainable products, followed by providing information on sustainability and offering sustainable concepts. Manufacturer most dedicated to sustainability (Top 3) 4% 4% 4% Don t know 65% Reasons for dedication manufacturers (Top 5) Offer wide range of sustainable products Providing information on sustainability Offer sustainable concepts Offering support on sustainable topic Local community engagement 49% 29% 25% 31% 9% 20

21 Sustainability: Opinions of architects Architects are divided about the growing importance of green facades and solar facades Statement: In my projects I expect green facades and solar facades to become very important in the next five years Contrarily in Poland about one-third of the architects (strongly) disagree with the statement Strongly agree Agree Neither agree nor disagree Disagree Strongly disagree Don't know 26% % (strongly) agree In most countries more than half of the architects seem to believe that the use of biobased materials is rising Statement: Usage of biobased materials in the construction of buildings is rising Strongly agree Agree Neither agree nor disagree Disagree Strongly disagree Don't know 29% % (strongly) agree 21

22 Sustainability: Opinions of architects German and Polish architects believe that local legislation is more important than European regulations Statement: Local legislation for me is more important than European regulations Strongly agree Agree Neither agree nor disagree Disagree Strongly disagree Don't know 67% % (strongly) agree Most architects (strongly) agree that sustainable products are essential in design for energy-positive buildings Statement: Sustainable products are essential in design for energy-positive and low-carbon buildings 2017 Most architects agree with the statement that sustainable products are essential in design for energy-positive and low-carbon buildings Strongly agree Agree Neither agree nor disagree Disagree Strongly disagree Don't know 75% % (strongly) agree 22

23 Sustainability: Opinions of architects Especially Italian architects would rather use carbon-neutral building materials and products Statement: I would rather use carbon-neutral building materials and products in my designs than traditional materials and products % Strongly agree Agree Neither agree nor disagree Disagree Strongly disagree Don't know 43% 68% 38% 81% 61% 52% 52% % (strongly) agree Architects are divided about the size of the impact of transforming existing buildings and new-build Statement: Transforming existing buildings into energy efficient buildings has a bigger impact than new-build % The European architects are divided about whether 45% transforming existing buildings into energy efficient buildings has a bigger impact than new-build. 66% 52% 62% 67% 54% % Strongly agree Agree Neither agree nor disagree Disagree Strongly disagree Don't know % (strongly) agree 23

24 Sustainability: Opinions of architects Architects not yet convinced that in 2020 a majority of the existing building stock will be nearly zero energy buildings Statement: In 2020 a majority of the existing building stock will be nearly zero energy buildings % In all countries most architects are reluctant to believe 22% that in 2020 a majority of the existing building stock will be nearly zero energy buildings. 32% Strongly agree Agree Neither agree nor disagree Disagree Strongly disagree Don't know 26% 21% 22% 27% 11% % (strongly) agree 24

25 Contents 1 Preface 3 12 Key Forecast finding overview 5 3 Economic and construction figures per country 10 4 Sustainability in the construction sector 28 5 Appendix 55 About Arch-Vision Background of the research Short-term outlook and turnover developments per country Results per segment Methodology Q2Q Barometer and Rolling Barometer calculation Future building volumes: forecast model, calculation and development Material Index Calculation Questionnaire USP Marketing Consultancy 25

26 Appendix About Arch-Vision For decision makers charged with considerations of company resources, staffing and marketing strategy, a clear insight into future construction volumes is essential. However, economic indicators seldom provide an adequate picture of these volumes. The construction industry operates in a delayed cyclical market, which means that buildings designed today will not be ready until at least two years from now. The economic activities of architectural firms provide a strong indication of the direction in which the construction sector will develop in terms of both building volumes and the way in which building volumes will be realised. Architects have already been monitored by several institutes in quite diverging ways between the different countries. For a more cohesive view Arch-Vision launched this European Architectural Barometer. The European Architectural Barometer is extremely useful for organisations with a focus on Europe that also want to compare the activities of architects in different countries. All interviews are conducted by native speakers. From the third measurement onwards two hundred interviews per country have been completed per measurement. The first two measurements were based on one hundred interviews per country. Arch-Vision is a sister company of USP Marketing Consultancy ( BouwKennis ( BauInfoConsult GmbH ( and BuildInfoConsult ( These are major agencies each providing full-service research support and specialised in the construction and real estate markets. 26

27 Appendix Appendix Cause and objective of research The objective of the European Architectural Barometer of Arch-Vision is to offer profound insight into the current economic situation and trends among architectural firms in the Netherlands, Germany, the UK, France, Spain, Italy, Belgium and Poland. The European Architectural Barometer provides knowledge about the future building volumes and the way in which these building volumes will be realized (trends). The following aspects have been answered through the conducted research: - What is the current order book among architects? - What are the expectations on the development of their order book for the next 12 months? - What are the expectations on the developments and what does Arch-Vision foresee as building volumes on the different markets? - The usage of what type of products is expected to grow or to decline given the building volume developments and the changes in the structure of the building volumes (new build vs. renovation projects)? 27

28 Appendix Sample and methodology of the research Most architectural firms have less than two FTE. Nevertheless the focus of the European Architectural Barometer is on the larger firms. Therefore the research is only conducted among architectural firms with two FTE and more. As the study is focussed on architects active in construction, architects that are solely active in interior or landscaping are excluded from the research. The table below shows the number of successful interviews of each country. The difference between the gross sample of respondents that were reached (all reached numbers) and the net sample of respondents that were reached, was caused by those architects who could not be contacted or had an incorrect phone number and those who did not meet the selection criteria (mostly due to the fact that the architectural firms had less than two FTE). The difference between the net sample of respondents reached and the response are the number of architects who refused to participate. Response Gross sample (all respondents attempted to approach) 1626 Net sample (all approached respondents) 906 Completed interviews 159 Response percentage (interviews/net sample) 18% 28

29 Appendix Background of the respondents (architects) Number of FTE The table on the right shows the average number of employees of the architectural firms within the current quarter of this research, divided by country. The architectural firms with one employee were excluded from this research. Average 7,4 2-4 FTE 54% 5-9 FTE 25% FTE 14% FTE 5% > 40 FTE 2% The second table shows the segment in which architects within this research are mostly active. Segment mostly active (single response) Housing 57% Non Residential 43% Don t know 0% 29

30 Appendix Background of the respondents (architects) The figure shows the split in activities in new build and renovation. Just like previous quarters, Italy still seems to have the smallest new build market as only 15% claims to be mainly active in the new build. On the other hand, they have by far the largest renovation market as more than half of the architects is mainly active in the renovation market. Also, the renovation market in Spain is quite big. You can clearly see that the majority of architects in countries as Poland, Belgium and the UK are equally active in new build and renovation. Dutch, German and Polish architects do relatively more new build than their other European colleagues. New development or renovation 28% 23% 49% 47% 24% 29% 19% 13% 69% 25% 33% 43% 15% 59% 26% 44% 19% 37% 26% 21% 54% 41% 12% 47% New build Renovation Equally active in new build and renovation 30

31 Appendix Questionnaire Standard (these questions are asked every measurement) 1. How many employees (in FTE) does your company currently have, including yourself? [if less than 2 FTE, end of research] 2. What is your position? 3. As an architectural firm, are you mostly active in the segment housing, non-residential building, interior or landscaping? [If interior or landscaping, end of research] 4. How many employees in FTE did your company have at the end of 2016? 5. How many employees in FTE did your company have at the end of 2015? 6. How many employees in FTE did your company have at the end of 2014? 7. If your turnover should relate to housing and non-housing, what percentage of your revenue do you get from housing-related jobs? 8. Are you mostly active in new build or renovation? 9. How did the turnover develop this quarter compared to the previous quarter? Decreased by more than 5%; Slightly decreased (0-5%); Stayed the same (0%); Slightly increased (0-5%); Strongly increased (more than 5%) 10. [If Increased with more than 5% or (very) strongly decreased ] Please specify how much in percentage was the increase/decrease the last quarter? 11. How did your order book develop in this quarter compared to the same quarter previous year? Decreased by more than 5%; Slightly decreased (0-5%); Stayed the same (0%); Slightly increased (0-5%); Strongly increased (more than 5%) 12. How many projects have been postponed in this quarter? 13. How many projects were not started and cancelled in this quarter? 14. Do you expect that your order book might be empty these coming 12 months? 31

32 Appendix Questionnaire Theme part (these questions are only asked in this quarter) 1. Now I would like to ask you some questions about sustainability. Would you rather define sustainability in the construction sector as using environmental friendly solutions or as having a positive influence on health and wellbeing in buildings? 2. Do your principals ask for sustainable materials/ buildings in their projects? 3. Can you indicate in what percentage of your new-build projects and renovation projects principals ask for sustainable materials/ buildings? 4. Can you indicate in what percentage of your residential and non-residential projects principals ask for sustainable materials/ buildings? 5. Why do you feel principals are not asking for sustainable materials/ buildings? 6. Do you expect the demand for sustainable buildings and materials to increase, stay the same or decrease in the next five years? 7. And do you feel that principals are willing to invest in sustainable materials/ buildings? 8. Why do you feel principals are willing to invest more in sustainable materials/ buildings? 9. When working on your projects which parties you cooperate with are most actively involved and committed to sustainability? 10.Where do you expect the biggest increase in demand for sustainable buildings and materials, in residential projects or non-residential projects? 11.And if you look at the division of new build and renovation projects, where do you expect the biggest increase in demand for sustainable buildings and materials? 12.Can you indicate how important the following building components are to build a sustainable or green building? 13.In what share of your residential/non-residential/new-build/renovation projects would you say sustainability is actually taken into account? 14.Are you aware of European legislation about sustainability? 15.When it comes to sustainability in your designs, for example, the usage of sustainable materials that are certified, do you do more in your designs than required by legislation? 16.Which sustainability certificates do you know? 17.And which sustainability certificates are most used in your projects? 18.Which type of certification do you value the most Is Complete Building Life Cycle Assessment (LCA) requested in your projects? 20.Is Complete Building Life Cycle Costing (LCC) requested in your projects? 32

33 Appendix Questionnaire Theme part (these questions are only asked in this quarter) 21. And in what share of your residential/non-residential/new-build/renovation projects is a sustainability certificate used? 22.Do you expect the use of sustainable certificates in your residential projects to increase, stay the same or decrease in the next five years? 23.Do you expect the use of sustainable certificates in your non-residential projects to increase, stay the same or decrease in the next five years? 24.In your opinion which manufacturers are most dedicated to sustainability? 25.What do(es) this manufacturer/ these manufacturers do that makes you feel they are most dedicated to sustainability? 26.At last I would like to ask your opinion about the following statements: 1. In my projects I expect green facades and solar facades to become very important in the next five years 2. Usage of biobased materials in the construction of buildings is rising 3. Local legislation for me is more important than European regulations 4. Sustainable products are essential in design for energy-positive and low-carbon buildings 5. I would rather use carbon-neutral building materials and products in my designs than traditional materials and products 6. Transforming existing buildings into energy efficient buildings has a bigger impact than new-build 7. In 2020 a majority of the existing building stock will be nearly zero energy buildings 33

34 Appendix About USP Marketing Consultancy 34

35 Appendix USP s of USP 35

36 Appendix What we do; Dedicated market research 36

37 Appendix What we do; multi-client research 37

38 Appendix Trends and Vision in the market 38

39 Appendix Some National and International Clients 39