Implications for U.S. Construction Companies in 1992 European Community

Abstract

The European Community is scheduled to complete its market integration by the year 1992. When completed, the market will combine the separate European economies into a vast market capable of large economies of scale throughout industry. Businesses operating within or without the European community must prepare themselves for a dramatically different operating environment. Heretofore, protectionist practices of the member nations have kept the European community fragmented into 12 separate economies. Although protectionist barriers are falling, their influence will still be felt. Within the construction industry, the 1992 implementation of an integrated European market is expected to affect four major areas: public works construction, technical regulations and standards, subcontracting, and corporate taxation. This paper discusses the implications of these four areas on construction firms who anticipate doing business within the European community. Also discussed are opportunities presented by recent openings into eastern Europe. Whether or not American construction companies decide to enter the Europe market, they need to appreciate the possible impact of European companies emerging as large, global competitors.