Crisis in the building sector

Subject: Crisis in the building sector

Following the outbreak of the COVID-19 pandemic, the construction sector has contracted sharply.

The crisis in the construction sector, combined with economic recovery in China, in other Asian countries and in the United States, which have grabbed a significant amount of global raw materials, has led to a sharp increase in raw material prices as denounced by trade associations, which have reported an increase of around 40% in polyethylene prices, around 20% for copper and more than 30% for petroleum and its products.

These price increases are likely to have a very strong impact not only on manufacturing businesses, but also on the public works that governments are planning in the wake of Recovery Plan funding.

In view of this:

Will the Commission adopt a specific monitoring system for raw materials in order to keep an eye on the situation?

Are there any initiatives in the pipeline that might be crucial for supporting the construction sector?

Supporter1

1 This question is supported by a Member other than the authors: Simona Baldassarre (ID)

Answer given by Mr Breton on behalf of the European Commission

(21 September 2021)

The Commission appreciates the importance of the construction ecosystem as an enabler of the green and digital transition, and as a prime driver of economic growth and employment in every EU Member State.

The Commission is carefully monitoring the sudden, but possibly temporary, price pressures in the market for construction materials and is analysing the scope, magnitude and the potential outlook of this phenomenon. The recent Commission analysis (2) on strategic dependencies confirms that the EU is highly dependent on third countries for certain raw materials.

The EU action plan on critical raw materials and the updated Industrial Strategy aim to foster the green and digital transitions.

This will involve developing resilient value chains for EU industrial ecosystems; improving circularity and resource efficiency; strengthening sustainable and responsible domestic sourcing and processing; diversifying supply with sustainable and responsible sourcing from third countries (a strategic partnership on raw materials with Canada was launched in June 2021, and with Ukraine in July 2021) and strengthening rules-based, open and undistorted trade in raw materials.

In the context of implementing the EU’s long-term budget and its recovery instrument NextGenerationEU, the Commission has been working with every EU Member State to finalise their National Recovery and Resilience Plans.

European flagship areas such as ‘Renovate’ and ‘Reskill and Upskill’ will stimulate economic growth and the green and digital transformation of the construction industry ecosystem (3).

⋅1∙ This question is supported by a Member other than the authors: Simona Baldassarre (ID)

⋅2∙ COM(2021) 350 final and SWD(2021) 352 final.

⋅3∙ Communication from the Commission to the European Parliament, the European Council, the Council, the European Central Bank, the European Economic and

Social Committee, the Committee of the Regions and the European Investment Bank Annual Sustainable Growth Strategy 2021, COM/2020/575 final, available at: https://eur-lex.europa.eu/legal-content/en/TXT/?qid=1600708827568&uri=CELEX:52020DC0575