Resources Policy 35 (2010) 235244

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Resources Policy
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European aggregates production: Drivers, correlations and trends

M.E. Menegaki n, D.C. Kaliampakos
School of Mining and Metallurgical Engineering, National Technical University of Athens, GR 15780, Athens, Greece

a r t i c l e in fo
Article history: Received 1 April 2009 Received in revised form 14 January 2010 Accepted 24 January 2010 JEL classication: Q3 Q31 Q32 Keywords: Mineral resources Aggregates industrial sector Aggregates production

abstract
Aggregates constitute the biggest branch of mining by production volume and the second in value, after the sector of fossil fuels. Their close connection with the construction industry places them among the most used materials worldwide, second only to water. Despite its signicance, the sector suffers from the non-systematic register of production data, resulting in weakness to study the main features affecting the sectors structure and future capacity. The paper focuses on the aggregates production in 26 European countries. Data from available sources are gathered and combined for a 10-year period (19972006), as an effort to provide a clear view of the major attributes of this vital industrial sector. Through a thorough analysis, the main drivers in aggregates production are revealed and existing correlations and trends are identied. New ndings are also presented, for example the signicance of GDP from construction and the strong connection of aggregates production per capita with the residential building sector. & 2010 Elsevier Ltd. All rights reserved.

Introduction Aggregates (crushed stone, sand and gravel) are one of the most important mining products. It is the biggest branch of mining by production volume (Regueiro et al., 2002), and the most valuable non-fuel mineral commodity in the world (Luttig, 1994). The US Geological Survey (USGS) calculations of industrial product indices for the United States in 2005 showed that the value of aggregates was more than one-third of the total value of non-fuel mineral materials mined. On a tonnage (sold or used) basis, the aggregates industry produced more than 85% of approximately 3.3 billion metric ton of non-fuel minerals mined in the United States in 2005, while aggregates consumption reached 9.8 ton per capita. The tonnage of crushed stone, construction sand and gravel produced accounts for more than two-thirds of the total non-metal mining production (Fig. 1) and is nearly three times the tonnage of US coal produced (Tepordei and Bolen, 2006). There is a similar situation in the European Union, where aggregates contribution to the total mining sector was 67% by volume and 23% by value in 2006 (see Table 1). According to the British Geological Survey (BGS) (2007), the production of primary aggregates in Europe ranged from 2350 to 2750 million ton per year for the years 19972005. According to the European Technology Platform on Sustainable Mineral Resources, the European aggregate production and consumption in 2006 was about

Corresponding author. Tel.: + 30 210 7722209; fax: + 30 210 7722156. E-mail address: menegaki@metal.ntua.gr (M.E. Menegaki).

three billion ton (ETP SMR, 2006). Annual per capita production varies within wide margins depending on the development and the market or industry characteristics of each European country. The aggregates industry differs from most other mining activities, since by their nature, aggregates are high-bulk, low unit value commodities that derive much of their value from being located near the market. More specically, it has been proven that transportation is a major cost driver and a critical parameter for their market prices. About 80% or 90% of production is transported with trucks (BGS-ODPM, 2005; Tepordei, 2005; Bolen, 2005) and Kaliampakos and Benardos (1999) estimated that delivering to a radius of 15 km from the quarry leads to a 30% price increase. A delivery distance of more than 40 km is therefore unusual (Drew et al., 2002). According to Bates (1969), aggregates have a high place value. As a result, aggregate quarrying will continue to take place in the vicinity of urban centers, close to the consumption sites. However, strict environmental regulations are a force towards limitation of exploitation sites all over Europe. In Sweden, for example, groups of stakeholders are now involved in the decision process for the establishment of new quarries and even the prolongation of current quarries, making approval in both the cases more complicated. In Italy, new quarries are only granted for a limited years license, making it difcult for producers to invest in necessary equipment. Given that the production of aggregates has and will continue to have an important role in European countries, the management of the sector in terms of sustainability has recently been of great concern. As a result efforts have been made to understand the

0301-4207/$ - see front matter & 2010 Elsevier Ltd. All rights reserved. doi:10.1016/j.resourpol.2010.01.003

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3,500 3,000 million metric tonnes 2,500 2,000 1,500 1,000 500 0 Aggregates Coal Industrial Minerals 24.2% 7.3% 68.5%

Fig. 1. Total USA production of non-metallic minerals in 2005.

Table 1 Share of EU minerals productiona. % of total mining % of non-energy minerals mining By value 47 33 18 2

By volume By value By volume Aggregates 67 Ornamental stone 1 Industrial minerals 3 Metallic minerals 2 Oil and gas 11 Coal and lignite 16
a

23 16 8 1 32.5 19.5

92 1 4.5 2.5

Calculations are based on data from ETP SMR (2006).

factors affecting aggregates production, aiming mainly at forecasting aggregates demand. For example, Corlioris Consulting Corp. (1996) developed forecasting models using regressions that conrmed the positive correlation with population and GDP for Lower Mainland (British Columbia), Canada. Jaeger (2006) found positive relationships between aggregate demand with population and income, in the case of Oregon, USA. In a loglog economic model developed to determine the effect of different inuences on aggregates demand in Scotland the positive inuence of GDP was also highlighted (WRAP, 2007). Bleischwitz and Bahn-Walkowiak (2007) calculated the economic relevance of aggregates for 18 European countries as production (in tons) per 1000h GDP per capita based on data for one year (i.e. 2005). Keeping in mind the uncertainties involved in aggregates data all over Europe, this paper attempts to analyse economic parameters associated with aggregates production. It focuses on the aggregates production in 26 European countries, during the decade from 1997 to 2006. Having in mind the uncertainties and the uctuations involved in aggregates data all over Europe, this is a typical period in order to perform a trend analysis. The correlations and trends resulted from the statistical analysis between production and demographic/macroeconomic factors of the 26 European countries are presented below. The contribution of each sub-sector of construction to the total construction sector has been also taken into consideration, revealing the signicance of the residential building sector as far as aggregate production per capita is concerned.

Production of aggregates in Europe Available data from the British Geological Survey (BGS), the European Aggregates Association (UEPG) and the European

Mineral Statistics have been gathered and sorted on a uniform basis. Assumptions were made for the percentage of the recycled aggregate materials produced, based on European reports. Table 2 presents the calculations of the total aggregate production (primary and recycled) in 26 European countries from 1997 to 2006. The ve main producers of aggregates in Europe from 1997 to 2006 were Germany, Spain, France, Italy and United Kingdom. Each produced more than 200 million tons of aggregates per annum, while the volume of aggregates produced in other European countries was signicantly smaller (Fig. 2). The output of aggregates production per capita presents signicant differences with regard to the leading countries. The average output in Europe for the year 2006 was about 7.1 ton per capita (Fig. 3), and the leading countries in per capita output were Ireland (31.8 ton), Finland (19.1 ton) and Cyprus (17 ton). On the other hand, the main producers had below average in per capita production (except for Spain, where the production per capita was 11.1 ton). These ndings are consistent with those of Bleischwitz and Bahn-Walkowiak (2007) for the year 2005. As far as the ve main producers are concerned, according to the Euroconstruct report (2006), the evolution in construction volume of three countries, namely France, Italy and Great Britain, was relatively even in the period from 1991 to 2005. The development in the remaining two economies in this group with regard to their construction output occurred in a completely different way. More specically, in Germany the boom after the reunication in the early 1990s was followed by a decade of recession in construction activities. In Spain the demand boom began in 1993 and disappeared in 1996. It seems that the aggregate production per capita follows the trend of the growth rate of construction. The above average aggregate production per capita in Spain was contrary to the situation for the other four main producers. Spain was in fth place in terms of per capita construction output while in terms of GDP it exceeded only Portugal among the Western European OECD member economies in 2008. This indicates the construction sectors dominant role in the national economy, as is conrmed by the ratio of output of construction to total GDP, equal to 21%, as against an average of 12% in the 19 Euroconstruct member countries (CRESME, 2008). The mean aggregate production per capita in the European countries under examination, indicated as eu in Fig. 4 for the years 19972006, was 5.6 ton. During this period the leading countries in per capita production remain the same. Ireland presents signicant variations in per capita production during the decade, which probably means that occasional needs occurred during this period. This special case is also underlined in the Euroconstruct report of 2006, according to which, since 1992 even two digit growth rates in the construction volume were observed. It is expected that the situation cannot be continued for a long time and in the near future the per capita production in the specic country will unavoidably slow down and this record construction growth will soon come to an end (Euroconstruct, 2006). For countries bordering the North Sea, production of marinedredged sand and gravel is a signicant part of supply, like for example in the case of the UK. Crushed rock produced from onshore sites is also conveyed by sea from Norway and Scotland (ECO-SERVE, 2004). Similar cases also exist in other European countries. Since transportation cost is a signicant factor in the aggregate sector, it is likely that sites located close to country borders obtain aggregate supplies from the adjacent areas of the nearby countries. So despite the local character of aggregate extraction, there is an international trade of aggregate materials within Europe

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237

Table 2 Production of aggregates (primary and recycled) in 26 European countries from 1997 to 2006. Countries Production (million tons) 1997 Austria (at) Belgium (be) Cyprus (cy) Czech Republic (cz) Denmark (dk) Estonia (ee)_ Finland () France (fr) Germany (de) Greece (gr) Hungary (hu) Irish Republic (ie) Italy (it) Latvia (lv) Lithuania (lt) Netherlands (nl) Norway (no) Poland (pl) Portugal (pt) Romania (ro) Slovakia (sk) Slovenia (sl) Spain (es) Sweden (se) Switzerland (ch) United Kingdom (uk) Total (26 countries) 24.4 34.0 6.5 36.0 56.2 1.9 347.5 477.4 65.0 28.8 218.1 4.5 61.0 91.7 70.0 12.5 10.4 60.6 61.6 232.2 1893.2 1998 23.6 41.6 7.7 32.4 53.6 2.4 356.7 468.2 41.0 27.2 266.1 0.5 6.0 63.0 84.8 75.0 1.0 14.7 10.3 70.7 74.8 230.0 1958.7 1999 25.0 46.2 8.5 30.4 69.1 1.8 80.0 374.7 523.4 27.9 100.0 303.5 0.8 8.5 30.0 62.0 92.2 70.5 0.8 10.1 12.4 297.4 79.3 30.0 233.6 2527.4 2000 49.5 48.7 8.8 30.5 57.8 4.4 80.0 399.2 488.0 34.8 41.0 0.8 8.4 28.1 53.0 101.5 70.5 0.8 9.7 12.5 383.7 71.2 33.0 231.9 2247.8 2001 48.3 59.0 9.3 34.0 55.5 4.1 91.5 418.0 514.2 77.0 40.9 112.8 273.6 2.3 5.6 137.7 51.0 101.2 71.3 1.1 10.3 24.7 285.9 73.2 319.4 2809.9 2002 54.4 58.8 10.5 37.9 53.7 6.2 90.4 403.8 483.6 76.8 45.2 110.8 253.6 2.5 7.9 98.5 50.0 91.2 93.6 1.6 11.3 24.7 336.3 72.9 299.8 2778.5 2003 57.0 53.9 10.7 45.6 51.2 6.1 95.5 403.3 468.5 82.0 50.6 100.7 263.3 3.6 7.7 89.7 51.0 104.1 89.9 1.1 12.1 26.3 374.0 72.6 291.5 2812.0 2004 60.6 55.5 11.6 47.1 57.7 7.8 98.5 412.2 442.6 79.0 59.4 100.7 236.3 3.2 9.5 80.0 52.0 95.1 91.0 1.5 13.1 24.7 388.7 79.2 31.7 306.8 2845.5 2005 57.7 57.1 12.1 48.5 69.9 10.2 107.5 408.9 428.1 90.0 84.1 135.0 274.6 2.3 11.8 76.9 53.0 117.3 93.0 1.5 19.7 23.6 396.2 86.0 56.6 296.7 3018.3 2006 104.5 83.4 13.0 72.7 58.3 12.0 100.5 425.0 541.9 100.0 90.0 134.0 354.0 3.0 13.0 123.5 58.4 169.0 97.5 23.0 27.0 23.5 485.5 87.0 61.4 274.0 3535.1

500

Mean Production (1997-2006)

400

300

200

100

0 de fr es uk it pl ie fi nl pt gr se dk no be at hu ch cz sl sk cy lt ee ro lv Country
Fig. 2. Mean production of 26 European countries from 1997 to 2006.

(Fig. 5). Based on data available from the British Geological Survey, for the years 20012005, the main European importers and exporters are the Netherlands, Belgium and Germany. The mass balance between imports and exports shows that Germany, United Kingdom and Norway export much greater quantities of aggregates than they import, while Netherlands is mainly an importer. In the 26 countries examined, the total volume of imports and exports is balanced, conrming the internal character of the European trade of aggregates.

Data analysis Aggregates are granular materials used in construction. Besides their use as an end-product in railway ballast or armour

stones, aggregates are also a raw material used in the manufacture of other vital construction products such as ready-mixed concrete (made up of 80% aggregates), pre-cast products, asphalt (made up of 95% aggregates), lime and cement (UEPG, 2006). All the above products are used for new urban development and infrastructure, rehabilitation of existing infrastructure and replacement of obsolete buildings. These sources of demand are in turn driven by macroeconomic and demographic factors like population growth and economic growth (Savoy, 1996). In order to examine the inuence of those parameters both aggregated data (i.e. total annual production, total population, etc.) and country-specic observations were used. The necessary data used for calculations came from EUROSTAT statistics database (2008). As far as aggregated data are concerned, the variations in population (POP), gross domestic product (GDP) and

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M.E. Menegaki, D.C. Kaliampakos / Resources Policy 35 (2010) 235244

Production per Capita (2006)

30

20

31.8 19.1 17.0

10

12.6 12.6 11.7 11.1 10.7 9.6 9.2 9.0 8.9 8.9 8.2 7.9 7.6 7.1 7.1 6.7 6.6 6.0 5.0 4.5 4.4 3.8

0 Country
Fig. 3. Aggregate production per capita in 26 European countries (2006).

1.3 1.1

ie fi cy no at sl es dk se pt gr ee hu ch be nl eu cz fr de it sk uk pl lt lv ro

40

30

Production per Capita Maximum Minimum Mean

26.3

20
13.8

17.9

12.3 10.9

10
6.2 5.2 5.8 5.9 4.0 4.2

9.7 7.4 5.6 6.4 7.0 4.8 4.7 2.4 0.9 5.1 2.7 0.2 2.6 8.0 8.5 4.6

at be ch cy cz de dk ee es eu fi fr gr hu ie it lt lv nl no pl pt ro se sk sl uk Country
Fig. 4. Mean, maximum and minimum aggregate production per capita in 26 European countries from 1997 to 2006.

Norway Sweden United Kingdom Spain Denmark Italy Switzerland France Germany Belgium - Luxembourg Netherlands -30 -20 -10 0 10 Millions tns
Fig. 5. Main average imports and exports from 2001 to 2005.

average imports average exports

20

30

40

50

construction GDP (GDPCON), and production of aggregates during the decade were examined in a sub-sample of 18 countries with no missing values (see Table 2) in order to come up with

consistent results. As shown in Fig. 6, GDP and GDPCON have a higher correlation with aggregates production than population does.

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239

Sum of 18 countries (1997-2006)

10000

8000

GDP (billion euros) GDPCON (x 100 million euros) Population (X 100000) Production (million tns)

6000

4000

2000

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

Year
Fig. 6. Variation of GDP, population and aggregate production as a total of 18 European countries from 1997 to 2006.

0.98 0.96 Pearson coefficient (r) 0.94 0.92 0.90 0.88 0.86 0.84 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 GDP GDPCON Population

Fig. 7. Correlation of aggregates production with GDP, GDPCON and POP per year (for the years 19972006).

To further clarify the relationship of aggregates production with GDP, GDPCON and POP, the Pearson correlation coefcient (r) was used on a yearly basis. According to the results (Fig. 7), the degree of variables correlation with aggregates production is high, presenting small uctuations in the years examined. However, GDPCON presents, in most of the cases, higher correlation with aggregate production than GDP. As for the POP variable, the degree of correlation is lower than in the cases of GDP and GDPCON. In order to determine the relation between aggregates production with selected demographic and macroeconomic characteristics of each country, bi-variable and multiple regression models were developed using the country-specic annual data. The dependent variable was in all cases the production of aggregates in millions of tons and the independent variable(s) were the population (POP), the gross domestic product (GDP) in thousands of Euro, the GDP from construction (GDPCON), also in thousands of Euro, and the unemployment rate (UR) of each country. It should be noted that the unemployment rate represents unemployed persons as a percentage of the labour force, part of which is occupied in the construction sector. This explains the relevance of the specic variable to the construction sector output and thus to aggregates production. Other socioeconomic and geographical factors were also involved in the regression models (i.e. share of construction GDP in total GDP,

country area, population density, and employment rate), but they proved to be statistically insignicant and were dropped from the rest of the analysis. In order to avoid serial correlation (or autocorrelation) due to the occurrence of time series counts, data were analyzed using the Prais-Winsten generalized least squares method, assuming errors have a rst order autocorrelation structure. The assumption of rst order auto regression was veried by partial autocorrelation of the raw data. The constant in all regression tests is considered to be zero, since if each of the independent variables in the simple regression models was equal to zero (POP, GDP, and GDPCON) there could not be any aggregate production. Accordingly, in the multiple regression models the independent variables used could simultaneously have the value zero, resulting in the nullication of aggregate production. Table 3 presents the results of the models. The results of the simple regressions show that POP, GDP and GDPCON were all good indicators for predicting the production of aggregates for the study area (i.e. the 26 European countries); nevertheless the highest R2 was obtained by GDPCON. In the multiple regression models, GDP per capita (GDPPC) and construction GDP per capita (GDPCONPC) were used instead of GDP and GDPCON in order to ensure the independence of the variables, since the two latter parameters are highly correlated with population.

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The results indicate that all coefcients were statistically signicant at the 1% level and the signs were as expected. The coefcient of determination increases when GDPCONPC is used in a model instead of GDPPC. The correlation is even higher when UR is added. Thus, Model 7, which involves POP, GDPCONPC and UR, produced a slightly better t (R2 = 0.779) than Models 46. The positive coefcients in population conrm the hypothesis that larger populations contribute to higher aggregate consumption. The positive signs in the economic growth coefcients (e.g. GDP, GDPCON, etc.) indicate that the demand for aggregates in similar populations differs according to the economic performance. The negative coefcients in the UR show that production decreases by approximately 3 million ton for each 1% increase in the unemployment rate. In an attempt to identify relatively homogeneous groups of cases, with regard to aggregate production, hierarchical cluster analysis has been implemented. Tests have been made using different sets of the variables (POP, GDP, GDPCON, UR, GDPPC and GDPCONPC) for cluster formation. The cluster method conducted was the betweengroups linkage and the measure used for calculating the distances between cases was the squared Euclidean distance. All of the

Table 3 Results of the regression models. Variables Model 1a Model 2

a

Coefcient 4.92E 006 2.31E

004

t 22.681 27.136 31.127 23.185 7.778 24.711 10.731 23.483 8.064 3.785 25.308 10.566 3.717

rho 0.768 0.811 0.797 0.793 0.837 0.774

Adj. R2 (%) 67.7 75.1 79.8 72.6 74.4 75.0

POP GDP GDPCON POP GDPPC POP GDPCONPC POP GDPPC UR POP GDPCONPC UR

Model 3a Model 4a Model 5a Model 6a

4.6E 003 4.68E 006 2.3E 003 4.82E 006 5.3E 002 5.02E 006 2.3E 003 3.376 5.05E 006 4.9E 002 3.143

Model 7a

0.784

77.9

N = 244 observations.

variable combinations, where POP was included, resulted in two main clusters, with 6 and 20 countries, respectively. The cluster with the 6 countries included also Poland together with the ve main aggregate producers, a fact helped, however, by its rank in population (sixth after the other ve countries and with much distance from the other 20 countries). Differentiations in the clusters formation occurred when GDPPC and GDPCONPC were chosen for the analysis. In both of the cases it can be considered that two main clusters were formed. More specically, clustering with GDPPC (Fig. 8) produced a group of countries located mainly at Central and Eastern Europe, including also Portugal, Cyprus, Greece and Spain (group A1), while the second group includes mainly countries of Western Europe (group A2). In the case of clustering with GDPCONPC there were three main groups, with the rst one including the countries of Central and Eastern Europe (group B1), the second one consisted of most of the countries of Western Europe, while the third one (group B3) includes only Ireland and Switzerland (Fig. 9). The main difference in the two analyses conducted is the movement of the four Western European countries towards the second group and the differentiation of Ireland and Switzerland from the latter. The common characteristic of the above mentioned four countries is the high average share of GDP from construction to their total GDP, in the decade under examination. On the other hand, Ireland and Switzerland present the highest average GDPCONPC among European countries that exceeds the amount of 2000h. In general, each of the groups that have been discriminated through cluster analysis reects areas with different development situations and also with diversied growth needs. In the rst group that concerns mainly Eastern and Central European countries, the average construction output during the decade examined was 4.9%, while in the second group of western European countries the ve main producers represent 70.7% of the total construction output (Fig. 10). These results are consistent with the respective results produced by Euroconstruct (2006). According to Eurocontsruct in 2005 the main focus of construction activities was, like in the previous years, the residential construction with EUR 642 bn, which is nearly half (47.7%) the total construction output of EUR 1308 bn. The smallest sub-sector, civil engineering, with EUR 276 bn, had a share of 21%. In the course of the 14 years from 1991 to 2005 total construction volume increased on average by 1.2% p.a. in the 19 Euroconstruct countries. Residential construction ( +2% p.a.) was

Fig. 8. Scatter graph of aggregates production per capita combined with GDP per capita and GDPCON per capita.

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241

Fig. 9. Scatter graph of aggregates production per capita combined with GDPCON per capita.

Fig. 10. Average construction output by country from 1997 to 2006.

clearly outperforming the average, while civil engineering reached only growth rates around 0.8% p.a., non-residential construction merely 0.5% p.a. The general picture is the same for the year 2007, with the two European areas presenting a signicantly different internal composition with regard to their construction market structure. More specically, as shown in Fig. 11, in Eastern Europe residential production accounts for approximately 26%, by value,

of the total construction sector, with the civil engineering being the dominant sub-sector in the construction market (ten percentage points more than the weight of civil engineering in Western Europe). In the Western European countries residential production still accounts for more than 49%, that is more than 700 billion euros, distributed equally over new production and renovation of existing residential assets (CRESME, 2008). According to the gures of Euroconstruct (2006), housing

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35% 30%

33% 29% 25% 24%

Eastern Europe Western Europe

25% 20% 20% 15% 10% 5% 0% Civil engineering New residential construction Residential New non-residential Non-residential renovation renovation construction 8% 18% 18% 13%

12%

Fig. 11. The construction market structure in 2007.

completions have grown from 1.85 million units in 1992 to 2.36 million units in 2005 in the Euroconstruct countries. The share of residential completions in the Eastern European countries is constantly very small, and amounts from 1992 to 2005 on average only to 8%. This fact suggests that residential building is the main driver in aggregates production, conrming the forecasts of EUROCONSTRUCT that the specic sub-sector of construction will have a strong impact on future construction demand, even though civil engineering is forecasted to grow strongly in the upcoming years, too (Gluch, 2007). Evidence that also reinforces this hypothesis is that countries with high aggregate production per capita in 2006 (Fig. 3) presented also high growth in residential market for the same year. More specically the leaders in residential market in 2006 were Ireland, which is the country with the highest aggregate production per capita in Europe, and Spain, which is the country with the highest aggregate production per capita among the ve main producers. At the other end, the countries with negative growth rate in 2006, as far as housing market is concerned, were Portugal and Poland (UEPG, 2007), which according to the GDPPC cluster analysis belong to the rst group of countries, where residential production contributes less to the construction sector. After cluster analysis, the regression models were analyzed for each of the formed groups in order to track down changes in the correlations (Tables 4 and 5). Group B3 (Ireland and Switzerland) was excluded from the analysis due to the limited number of data. The results showed a declining correlation for the groups containing the Central and Eastern European countries compared to the respective results of the models developed using data from all of the countries. In the case of A1 group the correlation is improved only when GDP is used as independent variable. The results are similar for group B1. On the contrary, the correlations produced by the groups containing the Western European countries (groups A2 and B2) are getting better in all of the models. However, in the A2 group the UR independent variable becomes non-signicant. Moreover, according to coefcients produced by the models, in the groups containing Central and Eastern European countries the production is mainly determined by the variables related to GDP or GDPCON, contrary to the groups containing Western European countries, where POP is a signicant indicator. For example, according to Model 6 (Table 4) an increase of GDPPC of 1000h

would result in an increase of aggregate production of 5.5 million ton for the A1 group, while the respective increase for the A2 group would be 1.61 million ton. The low signicance of population in the Central and Eastern European countries (groups A1 and B1) is also indicated by the low degree of correlation that occurred in the models including POP as the independent variable. This situation reects the differences of the economies of the countries of each group. In the case of the Western European countries this is mainly due to the even and relatively low annual average GDP growth rate, as a result of the development achieved. This practically means that in Western Europe construction activities and consequently aggregates production depend more and more on demographic dynamics, thus the population, and on the capacity to renew and upgrade existing buildings. In the Eastern European countries there is a higher GDP growth rate, since there is an increasing development there. However, the total degree of development in Eastern Europe is still much lower than in Western Europe. As a result, the same GDPPC increase in both groups of countries has a different inuence. For the Central and Eastern European countries, where the average value of GDP per capita is 5300h, the increase of 1000h represents a growth rate in GDPPC of approximately 18.9%, while in the Western European countries, where the average value of GDP per capita is approximately 25,000h the same increase represents a growth rate in GDPPC of only 4%.

Discussion The role of aggregates production in national economies remains signicant and this is not going to change in the future. The analysis conducted in 26 European countries over a 10-year period conrmed that aggregates production is signicantly correlated with socio-economic and demographic factors, such as the value of GDP and GDP from construction, the unemployment rate and the population, while, at the same time, other variables, such as the size of the area or the population density, failed to prove their signicance. The degree of the correlation of the above mentioned variables depends on country characteristics. The ve main producers of aggregates in Europe are Germany, Spain, France, Italy and the

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Table 4 Results of the regression models for the A1 and A2 groups of cluster analysis using GDPPC. Independent variables Coefcient A1a Model 1 Model 2 Model 3 Model 4 Model 5 Model 6 POP GDP GDPCON POP GDPPC POP GDPCONPC POP GDPPC UR POP GDPCONPC UR 3.50E 006 4.79E
004

t A2b 4.91E 006 2.10E 004 4.71E 003 4.83E 1.53E 003 4.97E 006 3.20E 002 4.97E 006 1.61E 003 1.433 5.08E 006 3.25E 002 1.125
006

rho A2 21.788 24.056 23.136 24.982 5.036 26.983 6.307 18.937 5.033 0.800 19.973 6.302 0.661 A1 0.778 0.429 0.690 0.809 0.786 0.771 A2 0.797 0.820 0.820 0.732 0.755 0.733

Adj. R2 (%) A1 30.4 87.7 69.3 46.7 51.7 51.5 A2 80 83 81.9 86.5 86.9 86.4

A1 7.554 29.972 16.915 7.533 6.888 7.429 7.640 7.702 7.288 2.006 7.610 8.243 2.041

4.86E 003 3.05E 5.31E 003 2.91E 006 7.90E 002 3.63E 006 5.50E 003 2.082 3.45E 006 8.30E 002 1.962
006

Model 7

0.746

0.750

57.2

87

a b

N = 126 observations. N =118 observations.

Table 5 Results of the regression models for the B1 and B2 groups of cluster analysis using GDPCONPC. Independent variables Coefcient B1a Model 1 Model 2 Model 3 Model 4 Model 5 Model 6 POP GDP GDPCON POP GDPPC POP GDPCONPC POP GDPPC UR POP GDPCONPC UR 2.85E
006

t B2b 5.59E
006

rho B2 25.213 21.741 25.027 22.026 3.168 21.022 5.147 18.575 3.949 2.709 19.182 6.270 3.426 B1 0.710 0.685 0.677 0.911 0.903 0.916 B2 0.647 0.790 0.774 0.631 0.674 0.720

Adjusted R2 (%) B1 49.5 84.5 80 63.7 60 64 B2 81.6 76.7 81.4 83.5 83.1 79.4

B1 9.394 21.915 18.795 9.757 6.937 9.981 5.973 9.093 7.085 1.174 9.351 5.988 0.744

5.94E 004 9.77E 003 3.15E 5.04E 003 3.35E 006 7.15E 002 3.06E 006 5.27E 003 0.815 3.28E 006 7.32E 002 0.530
-006

2.33E 004 4.58E 003 5.24E 1.17E 003 5.02E 006 3.76E 002 5.65E 006 1.74E 003 5.121 5.52E 006 5.00E 002 6.008
006

Model 7

0.903

0.732

59.8

81.5

a b

N = 88 observations. N =143 observations.

United Kingdom with an annual aggregates production over 200 million ton. The size of population, resulting in high GDP rates, has a dominant role in the aggregates production of the above countries. Nonetheless, this is not the case for Poland, which despite its large population has a relatively low production of aggregates due to the low degree of economic development during the period examined. The GDP from construction is also a safe indicator of aggregates production. Spain and Ireland are the countries with the highest share of GDP from construction to their total GDP on average for the decade examined. At the same time Ireland and Spain present the highest average on aggregate production per capita among the 26 countries and the ve main producers, respectively. The average aggregates production per capita in the 26 European countries was 5.6 ton for the decade, while the average production per capita for Ireland was 26.3 ton and for Spain 7.4 ton. It seems that in Europe there are two main groups of countries presenting different potential with regard to aggregates produc-

tion. For the Central and Eastern European countries, the average value of GDP per capita is 5300h, while the average GDP from construction per capita is 290h. In the Western European countries, including Ireland and Switzerland, the average value of GDP per capita and GDP from construction per capita is approximately 25,000h and 1200h, respectively. The aggregate production in each country seems to be strongly affected by the share of residential building sector to the total construction sector, since residential production in the group of Central and Eastern European countries accounts only for 26%, by value, of the total construction sector, while in the Western European countries residential sub-sector accounts for more than 49% of the construction sector. On these grounds, keeping in mind that in the near future it is expected that the housing market will show a decline, the average production per capita in Europe will remain at the same levels. A declining demand is also expected in the housing market of Ireland, which will consequently lead to the decline of the aggregates production per capita in the country. This estimation

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M.E. Menegaki, D.C. Kaliampakos / Resources Policy 35 (2010) 235244

conrms that the trend of high per capita production could not be continued for a long time. Differentiations may emerge between the two different groups of countries. More specically, the countries of Central and Eastern Europe may increase their production, while the Western European countries will probably present stagnancy. Thus, the overall European picture, with regard to aggregate production, is not expected to change dramatically in the near future, since it is mostly determined by Western Europe. References
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