ING reveals which construction sectors in European countries are recovering and which still take a while to recover.
He dutch bank ING recently published its report on the construction prospects in the EUin which he indicates that This year a significant decline in activity in the sector is expected. However, construction growth is likely to pick up next year.
According to the report: “We expect a decrease in construction volume this year (-1.5%). This forecast is lower than the previous one (-0.5%), mainly due to the revision of Eurostat data.”
The European data office recently raised the EU construction figure for 2023 from 0.1% to 1.4%. Therefore, growth has lasted longer than expected and consequently the decline started later, leading to a larger-than-expected contraction in 2024.
“Furthermore, at the beginning of the construction value chain, it appears that producers of construction materials (e.g. concrete, cement and bricks) have passed the nadir of production volumes.”
He increased delivery times It has also contributed to reducing non-residential and residential construction volumes, as both companies and individual buyers have slowed investment in new properties.
On the other hand, it is expected that the renovation subsectorwhich also includes sustainability works, see demand increase in the remainder of the year, as well as in 2025.
The same is likely to happen with the infrastructure investmentswith growth supported mainly by expansions of the electrical grid, investments in digital infrastructure and the ecological transition.
In 2025, along with these trends, the housing market is expected to rebound and that more permits be granted for the construction of new homes. Also this is likely to boost the construction sector.
France and Germany continue to record lagging construction volumes
German construction volumes fell 2.6% in the second quarter of the year, reversing the growth recorded in the first quarter.
The country also saw the construction sector weaken between 2021 and 2023, and this trend is likely to continue for the rest of this year as well.
According to the report: “In August, German contractors were the most pessimistic among major EU countries. The continued decline in construction permits for new residential projects in the first quarter of 2024 highlights the existing difficulties.
“However, Germany’s civil engineering sector offers some relief. The country’s infrastructure is in poor condition, and investments in roads and digital infrastructure are driving some growth in this subsector.”
ING also estimates that the production of Construction in France will fall by -1.0% this yearmainly because the country’s contractor sentiment has not yet recovered from last year’s weakness.
Los construction permits for new homes They are also being granted at a relatively slow pace, while falling house prices are discouraging new developments.
The housing market recovers in the Netherlands and construction growth in Spain soars
He dutch housing market recorded a higher number of building permits at the beginning of the year, along with an increase in sales of new construction homes. Both trends point to a housing market recovery.
ADVERTISINGHowever, the construction output market is expected to shrink 3% this year, still pressured by last year’s decline in new home sales and building permits.
The construction sector in Spain advanced a solid 4.5% last yearwhile it stabilized in the first half of this year. This was mainly due to both non-residential and residential permits developing at a good pace in the first quarter of 2024.
However, with production figures falling by 25% between 2019 and 2022las Spanish construction companies they keep fighting.
According to the report: “The investments of the EU recovery fund in the Spanish construction sector are also positive. “Therefore, We expect greater growth in the Spanish construction sector in 2024 and 2025but at a slower pace compared to 2023.”
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