The construction sector will be hit harder in 2013 than originally thought with total production due to shrink 5%, economic institute EIB said on Thursday.

Last year, the EIB forecast a 3% decline in 2013. ‘It is a fairly dramatic picture,’ director Taco van Hoek told the Financieele Dagblad. ‘In Europe, only countries such as Ireland, Spain and Portugal are performing worse.’

The construction of new homes will be down 8.5%, as the housing market crisis continues. This is unchanged from November. But hopes of a recovery in the building of public utilities, hospitals, offices and shops have been dashed. Production there is also now set to slump 5%, following a 9% drop in 2012.

Last year, construction sector production fell to €50bn, more than 20% down on its pre-crisis performance.

The knock-on effect on employment has led to an 11% jobless rate among construction workers. Almost one in five building workers aged over 55 are now without a job, the EIB said.