Construction is in better shape in Belgium, France, Italy and the U.K., reports COFACE. But "payment incidents are still widespread, particularly in the U.K. where the number of corporate bankruptcies is the most significant.” Even in the high-flying group of countries, including Germany, Poland and Sweden, construction industry bankruptcies are "higher than in other sectors," it adds.

Despite the euro crisis, austerity measures and worries about the global economy, HDB's Weitz is upbeat about prospects for German construction. He expects to see 2.5% growth this year, citing as evidence high levels of approvals for residential and commercial building projects for the months ahead. Further, he expects more growth in 2013.

Being bullish is still something of a novelty for Weitz, who recalls a decade-long construction recession in western Germany, starting in 1995, he says. A 5% growth in 2006 was welcome but "a mixed blessing," he adds. Caused by investors bringing forward future work to avoid a planned value-added tax hike in 2007, the mini-boom was short-lived.

After two quiet years, the market slipped back into recession in 2009 before recovering with 2.2% growth a year later, says Weitz. Then, last year, "circumstances were good" for a major hike in construction business. Investors saw "Germany, in general, and the real estate market especially, as a safe haven," says Weitz. Two stimulus packages also helped.

But for 2013, "the big question is public investment," says Weitz. Local government bodies, which account for more than half of construction, "seem very keen to reduce their budget deficits," he says. Constitutionally, the federal government must reduce the borrowings needed to fund its regular activities to 0.35% of GDP by 2016, and the states must eliminate their structural deficits altogether by 2020.

Euroconstruct shares Weitz's optimism for Germany’s near-term construction prospects. It forecasts continuing strong growth in building demand. Municipal cost cutting likely will reduce civil-engineering orders this year and next, adds Euroconstruct. But by 2014, total German construction output is forecast to rise some 10% in real terms above the level of 2008, the year of the collapse of the bank Lehman Bros.

For Europe as a whole, Euroconstruct sees continuing decline this year before the construction sector begins to overtake general economic growth. But with the region's demand nearly 20% below pre-crisis levels, Europe's construction market still needs much rebuilding to get where it was in the days when “subprime” was still a polite term.