European construction industry and its competitiveness: a construct of the European Commission

The 'European construction industry' is a fiction that tends to obscure its heterogeneous character and to mar studies and policies of the European Commission aimed at improving the internal and external 'competitiveness' of the sector. In order to assess the process of integration in Europe under the impact of its own dynamics as well as Union policies, this paper looks at the dynamics of the sector from three different aspects: as investment, production and labour process. It shows, in particular, the persistent regional and social disparities dividing the industry into separate entities. Political attention tends to focus on a small number of construction companies competing for a few projects which represent the European dimension. Yet, these companies still rely on their respective national bases and local labour from the place where construction is carried out. Persistent divisions between the states are also reflected in the low level of transnational organization of the construction industry. The policy of the European Commission generally ignores these divisions and attempts to establish principles intended to make a whole sector more 'competitive', while its component parts, operating at hugely different levels of productivity, do not even meet on the same market. This paper argues that, instead of trying in vain to introduce a 'knock-out' system of competition in the EU Member States, a targeted approach might help raise productivity in lagging regions and thus improve the basis of competitiveness on global markets.