European Construction Outlook: Tracking Growth Rates

Europe’s construction recovery is underway, but it’s taking time to gather speed. Growth is returning across most major markets in 2026, with infrastructure leading the way and new residential construction gaining momentum in France, the Nordics, and the Netherlands. Germany and the UK are moving more slowly. Permits, starts, and orders are improving, but high financing and construction costs, stretched affordability, and economic uncertainty are limiting growth. Once these pressures ease, however, Europe’s pent-up demand should translate into a stronger, broader recovery.

Europe needs more housing, and governments are backing ambitious building targets with significant funding and policy support. But construction has yet to catch up, with the number of homes completed in several markets still well short of government targets. New residential construction should be a key growth engine through 2029, alongside infrastructure investment and fast-growing pockets such as data centers. The direction is clear, but the pace and scale of the recovery will depend on how economic conditions evolve.