Why we expect higher profit margins in European construction

Manufacturing, Construction and Retail Articles3 March 2026  Why we expect higher profit margins in European construction Despite lower construction activity and rising building material and wage costs, European builders have kept margins stable for some years. If energy prices remain moderate despite the Middle East conflict, we expect further profit gains as capacity constraints increase Maurice van Sante Senior Economist Construction & Team Lead Sectors If energy prices remain moderate, tighter capacity should support further profit gains In this Article Construction margins more or less stable since 2008 Tight capacity conditions are pushing prices upward Profit margins of large companies are slowly improving Room for margin improvement As economists, we tend to focus primarily on production volumes – how much a sector produces, builds or delivers. Profitability often receives less attention, even though it is just as crucial for understanding a sector’s underlying strength. In this article, we take a closer look at that side of the narrative for the European construction sector. Construction margins more or less stable since 2008 Unfortunately, reliable data on total profit margins in the European construction sector is hard to find. Therefore, we use the gross operating surplus (the value added that remains after paying for labour and intermediate inputs) as an indicator. The graph below shows that this margin has broadly been stable during the last 15 years (besides...