Europe’s construction downturn is easing, but the forecast is for a restrained recovery rather than a boom. EUROCONSTRUCT’s June 2026 outlook says construction output across its 19-country area fell just over 3% in 2023–2024 and is forecast to grow just over 2% cumulatively in 2026–2028. The direction is improving, but performance varies sharply by country and type of work.
Is Europe’s construction downturn ending?
The EUROCONSTRUCT forecast points to a gradual turn from contraction to growth. Its annual real-output estimates and forecasts show the change in pace:
| Year | EC-19 construction output change | Status |
|---|---|---|
| 2023 | −0.8% | Estimate |
| 2024 | −1.7% | Estimate |
| 2025 | +0.2% | Estimate |
| 2026 | +2.0% | Forecast |
| 2027 | +2.2% | Forecast |
| 2028 | +1.9% | Forecast |
EUROCONSTRUCT separately describes the combined 2023–2024 decline as just over 3% and the expected cumulative growth in 2026–2028 as just over 2%. These are figures for the network’s 19-country area, not every country geographically in Europe. National statistical definitions also differ, so the combined measure should not be read as perfectly harmonised country data. EUROCONSTRUCT’s 101st conference forecast was presented on 5 June 2026.
Why the recovery is weak and uneven
Housing and new building remain under pressure
Weak demand, high costs, limited financing and reduced affordability weigh on housing and new building in several large markets. Germany, France, Austria and Italy are among those EUROCONSTRUCT identifies as facing weak housing demand, high costs or limited financing. The forecast expects new building construction to grow faster than renovation in 2026–2028, but that does not make the housing rebound uniform across countries.
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Renovation is steadier, but households are cautious
Renovation has been more stable than new construction, yet EUROCONSTRUCT expects its growth to be slower. It links the muted outlook partly to economic and consumer uncertainty, which is limiting households’ willingness to invest in home improvements.
Infrastructure and public investment provide support
Civil engineering has been the strongest major segment in recent years, supported by transport projects, energy infrastructure, security and contingency-planning needs, climate adaptation and EU-supported investment. The European Commission’s Spring 2026 forecast says construction investment should be relatively resilient in the near term and that the Recovery and Resilience Facility (RRF) will continue to support non-residential construction in 2026. It also notes that housing investment typically responds to interest rates with a lag.
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The Commission projects EU GDP growth of 1.1% in 2026, after 1.5% in 2025, and 1.4% in 2027. Those are economy-wide growth forecasts, not construction-output estimates. The Commission also identifies financing costs and uncertainty as constraints on firms’ investment capacity and plans. European Commission, Spring 2026 Economic Forecast.
What the latest activity data say
Eurostat’s first estimate for June 2026 shows why a medium-term recovery forecast should not be mistaken for a smooth monthly rebound. Seasonally adjusted construction production fell from May by 1.3% in the euro area and 1.0% in the EU. Compared with June 2025, it was down 0.7% in the euro area but up 0.2% in the EU.
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- Building construction: down 4.9%.
- Civil engineering: up 1.4%.
- Specialised construction activities: up 0.5%.
In the euro area, building construction fell 6.5% year on year while civil engineering rose 0.3%. National results also diverged: annual output declined in Spain (−8.5%), Hungary (−5.0%) and France (−4.5%), while Slovenia (+22.9%), Romania (+18.4%) and Finland (+12.0%) recorded the largest increases among the countries listed by Eurostat. These June observations are a short-term production indicator; EUROCONSTRUCT’s figures are a medium-term real-output forecast, so the two series describe different things. Eurostat’s June 2026 construction production release.
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Which European construction markets are forecast to grow?
EUROCONSTRUCT’s country projections show markedly different trajectories. The percentages below are annual output changes in its forecast, not observed results:
| Country | 2026 forecast | 2027 forecast | 2028 forecast |
|---|---|---|---|
| Ireland | +5.3% | +5.8% | +6.2% |
| Poland | +6.4% | +4.9% | +3.1% |
| United Kingdom | Not stated in the cited 2026 figures | +4.3% | +5.1% |
| Portugal | +4.4% | +3.6% | Not stated |
| Finland | +4.7% | Not stated | Not stated |
| Spain | +3.2% | Not stated | Not stated |
| Slovakia | −2.9% | Not stated | Not stated |
| Hungary | −1.5% | Not stated | Not stated |
Not-stated cells indicate that the cited forecast summary does not give a figure for that country and year. EUROCONSTRUCT describes Ireland as the fastest-growing market, supported by public investment and steady demand; it characterises Poland’s medium-term growth as strong, though slightly revised down. It also points to building and civil engineering growth in Spain and Portugal. Italy is forecast to contract in 2027 and 2028, while Belgium is projected to be nearly flat over those years. The full EUROCONSTRUCT release provides the forecast context.
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How to read the different indicators
Headline figures can appear to conflict because they cover different geographies, periods and measures. A useful comparison keeps four distinctions in view:
- Geography: Eurostat reports EU and euro-area indicators; EUROCONSTRUCT covers EC-19 and gives country forecasts.
- Time and status: Eurostat’s June 2026 release reports observed monthly production and year-on-year changes. EUROCONSTRUCT estimates earlier years and forecasts output through 2028.
- Sector: Residential, non-residential and civil engineering activity can move in opposite directions.
- Work type: New construction and renovation have different demand drivers and forecast growth rates.
A construction-equipment industry perspective provides a further cross-check, but not a substitute for official production statistics: CECE’s February 2026 report describes new building, particularly housebuilding, as the main weakness in 2025, while civil engineering grew roughly 3% and helped keep total activity stable. CECE also emphasises national differences. CECE Annual Economic Report 2026.
Professional readers seeking detailed country background and sector forecasts can consult EUROCONSTRUCT’s Summary Report description and reports catalogue.
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