According to the Economic and Steel Market Outlook 2025-2026/Q4 2025 Report from the Economic Committee of the European Steel Association (EUROFER), in the second quarter of 2025 construction output in the EU recovered slightly by 0.1 percent year on year.
As expected, residential investments, which are highly sensitive to interest rates, declined for the 11th consecutive quarter in the second quarter, down 2.7 percent, while civil construction investments posted a 2.9 percent increase, year on year.
Lingering uncertainty in the sector is expected to continue through the first half of 2026, mainly because the positive impact of lower interest rates will take time to materialize. Additional monetary easing remains possible, but will hinge on how prices evolve in the coming months. Reflecting trends in real production, the sector’s fragility is also evident in the latest quarterly construction investment figures, which registered weak year-on-year results for the fifth consecutive quarter in the second quarter of 2025.
For 2025, the sector is projected to see only marginal growth (+0.1%, previously estimated as flat) amid ongoing softness in housing demand. A stronger rebound is forecast for 2026 (+2.2%, slightly revised from +2.3%), largely supported by the expected impact of monetary loosening.