Renovation Takes Center Stage: Driving Growth in the Construction Sector with Energy Efficiency Measures
Aa
Share
Renovation is taking centre stage in the construction sector
Energy efficiency measures which aim to improve the quality of existing buildings are driving growth in the EU renovation sector. As a result, renovation now accounts for more than half of construction work. We expect that steady growth to continue due to sustainability regulations and high energy prices.
The renovation and maintenance market is not glamourous, but it is huge
The renovation sector is experiencing a tailwind at the moment. Due to high energy prices last year, there has been a run on all kinds of energy-saving measures for houses.
The renovation and maintenance (R&M) market is often called the forgotten market of the construction sector. It is fragmented and therefore dominated by small (one-man) firms, less glamorous than new construction and with a lack of data. However, the EU total construction production volume consists of more than half (see below) of R&M activities. This means that the total annual revenue of this sector in the EU is approximately €850bn which makes it an important economic segment.
Important sales channel for building material suppliers
This means that a wide range of (large) building material suppliers are dependent on the R&M market, from manufacturers of insulation materials, wooden building products and chemical companies that produce paint, to suppliers of pipes and cables. Building materials that are not so commonly used in R&M are concrete, bricks and cement.
Interest in solar panels slows down after peak demand
Energy efficiency measures such as insulation, insulating glass as double glazing, heat pumps and solar panels are seen as integral parts of the renovation and maintenance market in the construction sector.
Interest in solar panels, in particular, has soared. In many European countries, Google searches for solar panels rose significantly, which suggests purchases did too. In the Netherlands, solar energy production increased by 46% in 2022. This tremendous growth rate benefited numerous installation companies operating in this business.
Since energy prices began to moderate this year, interest in solar panels has slowed although it remains at a high level. So, the craziness in the market has subsided but the price shock has still raised awareness about the importance of energy-saving measures.
Interest in solar panels has decreased but remains high
Development of monthly energy prices (electricity, gas, solid fuels and heat energy) in the eurozone and Google search development for "solar panels" (in local language*) in several EU countries (Index Jan 2018=100)
