According to the Economic and Steel Market Outlook 2022-2023/Q4 2022 Report from the Economic Committee of the European Steel Association (EUROFER), in the second quarter construction output in the EU increased by 9.7 percent, following a rise of 17.1 percent in the first quarter, both year on year.
According to the EUROFER report, in line with actual production volumes, gross fixed investment in construction in the EU grew for the sixth consecutive quarter, increasing by 2.6 percent year on year in the second quarter this year. Growth in the second quarter was fueled by the increase of 2.2 percent in residential investments despite the expectation of higher future mortgage rates due to the announcements of monetary policy tightening to curb inflation.
The expansion in civil engineering is expected to continue during the second half of 2022, as governments have been using it since the Covid-led recession of 2020 as a cyclical tool (thanks also to NextGenerationEU programs) to bolster recovery. However, the impact of these publicly-funded construction schemes is expected to ease considerably due to multiple downside factors such as supply chain issues, the war in Ukraine, and rising prices of construction materials.
According to EUROFER, construction activities in the EU in 2022 are expected to increase by 5.6 percent, a higher growth than the previous estimation of 5.3 percent, amid positive developments in the first half. However, the trend is expected to ease over the forthcoming quarters and is set to indicate declines in the fourth quarter of 2022 and the first quarter of 2023.