According to the Economic and Steel Market Outlook 2025-2026/Q1 2025 Report from the Economic Committee of the European Steel Association (EUROFER), in the third quarter of 2024, construction output in the EU decreased by 2.2 percent year on year, reflecting the effects of the rises in interest rates in 2022. The negative trend is expected to persist until the first quarter of 2025, primarily due to the lagged impact of lower interest rates.
In line with real production volumes, the recession in the sector has been confirmed also by the latest quarterly developments in investment in construction, which dropped year-on-year for the third consecutive time in the third quarter of 2024, decreasing by 2.7 percent. Residential construction investment dropped by 3.7 percent, after a 4.7 percent decline in the second quarter. Showing a 0.8 percent recovery in the previous quarter, investments in civil engineering dropped by 1.7 percent.
While overall construction activity is expected to benefit to a limited extent from government support, the impact of this support is expected to significantly decrease in 2024 due to multiple factors, including the shortage of construction materials, rising raw material prices and reduced fiscal room for construction spending in EU countries.
EUROFER expects the sector to recover by 1.1 percent in 2025 and by 1.8 percent in 2026, primarily due to the projected impact of monetary easing. The association has also revised its previous forecast for 2024 from a 1.3 percent decline to a 1.1 percent decrease.