European Construction Set for Gradual Recovery

The European construction industry experienced a period of weak performance in 2024 (–1.7 percent) and 2025 (+0.3 percent). High interest rates, buoyant inflation and rising construction costs were painful especially for residential construction. The Euroconstruct network anticipates a recovery in 2026 (+2.4 percent), which is expected to continue in 2027 and 2028. Civil engineering remains the strongest growth sector, driven by investment in energy infrastructure and rail transport. Austria exhibits a similar but delayed pattern: real construction investment contracted by 5.2 percent in 2024 and by 0.8 percent in 2025. For 2026, only a sideways movement of +0.2 percent is expected (2027-28 +1 percent p.a.). Fiscal consolidation will increasingly hit civil engineering. In residential construction, however, stabilisation is emerging (+0.5 percent after –1.6 percent in 2025).