Europe’s construction sector set for sustained growth through 2028
Summary
Europe's construction sector is projected to grow steadily through 2028, with significant contributions from residential and civil engineering due to infrastructure needs.
Why It Matters
This article highlights the anticipated growth in Europe's construction industry, driven by housing shortages and infrastructure investments. Understanding these trends is crucial for stakeholders in the construction sector, including investors, policymakers, and industry professionals, as they navigate opportunities and challenges in the coming years.
Key Takeaways
- The European construction industry is expected to grow at rates of 2.4% in 2026, 2.2% in 2027, and 1.9% in 2028.
- Residential and civil engineering sectors will lead growth, driven by housing shortages and infrastructure investments.
- Renovation projects dominate residential expenditure, accounting for over 60% of investments.
- Public sector projects in education and healthcare are expected to boost non-residential construction.
- Economic improvements, including wage growth and interest rate adjustments, support the industry's recovery.
The European construction industry is expected to accelerate significantly, with real growth forecasts of 2.4% in 2026, 2.2% in 2027, and 1.9% in 2028, according to the Ifo Institute as part of the Euroconstruct research group. This follows a modest 0.3% expansion in 2025. © Sandra Dragojlovic | Dreamstime Residential and civil engineering sectors are projected to lead growth, with total market volume rising by around 7.5% between 2025 and 2028 due to regional housing shortages and major investment needs in transport and energy infrastructure. However, Dorffmeister of Ifo cautions that special funding measures may only partially benefit the German construction industry, mainly supporting rail projects. Other building construction segments are forecast to grow by 4.7% by 2028, driven largely by public sector projects in education and healthcare, while private sector activity remains constrained by location and economic factors. Renovation of existing properties continues to dominate investment, representing over 60% of residential expenditure and increasingly shaping non-residential building trends. Analysts emphasise that improved economic conditions, including wage growth and interest rate adjustments, underpin this momentum, signalling a robust multi-year recovery for Europe's construction markets. Source: www.moebelmarkt.de
