Europe’s road to recovery and resilience

With the final two quarters of 2024 now concluded, Europe’s construction sector has successfully bridged economic divergence, policy shifts, and sector-specific challenges. While overall growth remained positive across the region, its pace varied country to country, and while some economies experienced a slowdown, the majority continued to grow and demonstrate resilience, driven by strong consumer demand and targeted public investment.

In the second half of 2024 macroeconomic trends indicated a mixed recovery, with GDP growth recorded across most European markets despite challenges in industrial output, exports, and private investment. Spain, Poland, and Slovakia benefited from job creation and robust consumer spending, while Austria and Germany continued to struggle with recession effects and weak investment. Forecasts suggest GDP growth will accelerate in 2025 and 2026 across the region, driven by rising real wages, improving investor sentiment, and EU-backed Recovery and Resilience Planned infrastructure projects.

Over the same period inflationary pressures eased across most countries, largely due to stabilising energy and food prices, which helped boost consumer confidence and investment. However, Hungary and Slovakia are anticipating temporary inflation increases in 2025 due to the removal of energy price caps, before returning to current levels and stability in 2026. Unemployment remained stable across the countries reported on, but its level varied by region, with higher endemic rates in Southern Europe, particularly France and Spain when compared with lower reported levels in Central and Eastern Europe.

The construction sector presented a mixed picture, having been influenced by both structural and cyclical factors. In Czechia, Romania, and Poland, steady activity was sustained by strong public investment and rising housing demand. However, in Austria, Germany and Italy, high interest rates and elevated energy costs tempered private sector investment, leading to a decline in residential demand. Seasonal factors also played a role, with the Construction Confidence Indicator (CCI) seeing reported figures fall across the colder regions as adverse weather conditions negatively affected order books and work expectations. Other notable CCI trends included in France, where construction sentiment also softened following the completion of major projects in preparation for the 2024 Summer Olympics in Paris, and Portugal, which conversely reported its highest-ever CCI, largely driven by tourism-related development.

Government intervention remained key in sustaining construction activity, with large-scale investments in transport infrastructure, green energy, and urban redevelopment helping to drive momentum. Sustainability and efficiency continued to be central priorities, as firms adapted to regulatory shifts and implemented eco-friendly materials and energy-efficient solutions.

As 2025 begins, the European construction industry must try to bridge the gap between near-term uncertainties and long-term growth potential. The following country-specific reports provide deeper insights into each national market’s challenges and opportunities.