According to the Economic and Steel Market Outlook 2025-2026/Q2 2025 Report from the Economic Committee of the European Steel Association (EUROFER), in the fourth quarter of 2024, construction output in the EU decreased by 1.6 percent year on year, amid global uncertainty and higher interest rates. The negative trend is expected to persist until the third quarter of 2025, primarily due to the lagged impact of lower interest rates.
As expected, residential investments, which are highly sensitive to interest rates, declined for the ninth consecutive quarter, down 3.9 percent in the fourth quarter, while civil construction investments posted a 1.5 percent increase, year on year.
EU countries have been using public construction spending since the Covid-led recession of 2020 to bolster recovery. While overall construction activity is expected to continue benefitting to a limited extent from governmental housing support and public construction schemes, the impact of these publicly-funded projects eased somewhat during 2024. As a result, the sector is expected to grow only 1.1 percent in 2025 and 0.8 percent in 2026.