European construction output slumped in 2024 but next year could bring weak recovery

That’s according to research by Euroconstruct, which presented its European construction market forecasts up until 2027 at its conference last week.

It forecast a decline in construction output of 2.4% in 2024, across the 19 European countries it monitors.

But it said it expected a modest 0.6% recovery in 2025.

Source: Euroconstruct

The 2024 figure represents a 0.3-percentage-point upward revision compared to previous estimates but growth in 2025 will now be weaker than Euroconstruct’s economists initially anticipated, it said.

The much-publicised struggles of the new residential construction market were the main reason for the decline during 2024, with high property prices, elevated interest rates and high construction costs all presenting obstacles.

However, Euroconstruct forecast that the sector would stabilise in 2025 and growth would start to accelerate in the following years. But the residential renovation market, which is also in contraction in 2024, will continue to decline further in 2025, it warned.

An improvement in the housing sector is expected from 2026 onwards, driven by demographic factors, economic conditions and more favourable subsidy for housing renovation, Euroconstruct predicted.

Source: Euroconstruct

The non-residential construction sector in Europe will decline in 2024 but growth in new construction and renovation is expected to return next year. Euroconstruct said new investment would be particularly “bright” for publicly funded market segments, while the drive to meet “green goals” will push renovation activities across the sector further ahead.

The picture also looks positive for civil engineering, where the urgent need for upgrades to transport networks and energy infrastructure is drawing in investment. Euroconstruct forecast that new civil engineering projects would grow more significantly over the next two years, against a more stable backdrop for renovations works.