European Construction Set to Rebound in 2025 as Building Permits Surge
Europe: The EU construction sector is expected to see a 1.5% decline in 2024, a larger decrease than previously forecast, largely due to revised data from Eurostat. However, signs of recovery are emerging, with building permits rising and material production volumes stabilizing. House prices have begun to increase in many EU countries, driven by housing shortages and slightly declining mortgage rates.
For 2025, the EU construction sector is expected to see growth, driven by increased demand for renovations, energy-efficient upgrades, and continued investments in infrastructure. The recovery of the housing market and the rising number of building permits for new homes will further support this growth. With building material costs stabilizing and housing prices increasing in many countries, developers are finding more opportunities to launch new projects. Investments in digital infrastructure, energy transitions, and the expansion of the power grid will also contribute to the sector's positive outlook for 2025.
Permits for non-residential buildings, however, are expected to decline due to economic uncertainty. Poland and Ireland show strong residential growth, while Germany and France continue to face challenges. Turkey has seen 7.8% growth after years of contraction.
Source: ING