Construction activity in the 19 Euroconstruct countries is projected to decline by 2.4% in 2024, while next year it should return to growth, with an estimated rate of 0.6%, according to the conclusions of a conference held in early December 2024, in Milan.
According to Euroconstruct data, total construction output is set to grow by 0.4% in Western Europe during 2025, while in Eastern Europe it should expand by 3.5%.
The primary challenge for the European construction market in 2024 is the significant decline in new residential construction. High property prices, elevated interest rates (albeit declining) and high construction costs are the main obstacles. However, the sector is anticipated to stabilize in 2025, with growth accelerating in the following years. The residential renovation market is also in contraction, with a decline this year and a further decline next year. An improvement in the housing sector is forecast from 2026 onwards.
The non-residential construction sector has faced challenges, with a modest decline experienced last year. This downward trend is expected to continue this year, due to new non-residential construction projects that are under pressure. Despite these challenges, growth is projected to resume next year, with both new construction and renovation activities contributing positively to the overall non-residential construction sector. New investment will be particularly bright for the mainly public funded market segments.
Civil engineering remains a bright spot, driven by the urgent need for upgrades in transport networks and energy infrastructure. Investments in these areas are crucial to meet new demands and political goals. New civil engineering projects, after a weak 2024, are expected to grow significantly in the next two-year period.
