Slump in the European Construction Industry

European economic growth was subdued in 2023, which also had a negative impact on the construction sector. In addition, the unfavourable development of construction prices and the European Central Bank's interest rate policy had a dampening effect. The construction output in the 19 countries covered by Euroconstruct fell by 1.7 percent in real terms in 2023 compared with the previous year. Forecasts point to a slight upturn in the overall economy in 2024, but GDP growth in real terms will remain low at 1.3 percent. The situation in the construction industry remains tight due to high construction prices, financing costs and lower purchasing power. Building construction will therefore remain under pressure. Only civil engineering is likely to benefit from public investment in transport infrastructure and renewable energy sources. Overall, real construction volume in Europe is expected to decline by 2.1 percent in 2024. The Austrian construction industry will not be able to escape these developments. There are also special factors such as more restrictive lending, which will have an additional negative impact on residential construction in particular. Overall, the volume of construction in Austria is forecast to fall by 4.1 percent in 2024, and a somewhat stronger recovery is not expected until 2026.