European building sector not out of recession yet, claims Swietelsky

The recession still has the European construction sector in its grip, a leading building company has warned.Linz-based Swietelsky, Austria’s fifth-biggest construction firm, said today (Tues) that it would give a “careful” outlook due to the “insecure situation” in the Eurozone. The term describes the 16 European Union (EU) members which use the Euro as their sole currency.Eurozone member Ireland recently applied for subsidies from the 750-billion-Euro European Financial Stability Facility (EFSF) which was set up by the EU and the International Monetary Fund (IMF) to avoid state bankruptcies in the EU. Greece, which is also part of the Eurozone, has been receiving billions of Euros of credit from fellow EU members for around half a year.Swietelsky also said today that the European building sector was still in recession. The firm’s earnings before interest, taxes, depreciation and amortisation (Ebitda) edged down by 0.7 million Euros to 42.4 million Euros in the first half of its 2010/2011 business year, while earnings before interest and taxes (Ebit) declined from 33.9 to 32.6 million Euros. The company’s equity ratio dropped by 0.4 per cent to 28.4 per cent in that period.Figures presented today also show that the overall staff number at Swietelsky declined by an average 7,484 to 7,222 year on year in the first six months of the current business year, while the value of orders improved by around five per cent to 998 million Euros. The company announced it would continue to carry out firm-internal restructure measures to act more efficiently.Warnings of a frail European construction sector come around half a year after claims that the economic downturn will affect the branch for two more years.Wolfgang Hesoun, who was recently assigned as the new head of Siemens Austria, said in his function as CEO of Viennese building firm Porr in April: “I expect the construction industry to reach its nadir this year, while although the crisis will continue to be felt until 2012.”He explained at that time: “Our order books were full when the credit crunch occurred. That means we have been feeling the effects of the crisis ever since.”Hesoun claimed that, at least as far as the infrastructure branch was concerned, the government’s economic stimulus packages had worked.Porr’s Ebit decreased from 7.2 million Euros in the first half of last year to 6.9 million Euros in the first six months of 2010, while its turnover declined from 1.107 billion to 955 million Euros.Porr is Austria’s third-strongest building company as far as turnover is regarded. It has been headed by Viennese businessman Karl-Heinz Strauss since September.The company announced only yesterday that it has been contracted to build a football stadium in Tripoli, Libya, for around 200 million Euros. The venue will be one of five stadiums in three Libyan cities at which 2013 African Cup of Nations matches will played.