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Report from
Europe
European construction – anticipated modest upturn in
2025
According to Euroconstruc, the European building sector
will return to growth in 2025 although the improvement
will be modest.
At the 98th Euroconstruct conference in Milan in
December 2024 delegates heard views on the current state
of the construction market across the 19 countries covered
by the organisation. They were also given perspectives
and analysis from the just published ‘Winter
Euroconstruct’ country and summary reports.
The European building industry, according to
Euroconstruct, continues to go through a challenging
period facing persisting external factors. These include
geopolitical stress, notably the war in Ukraine, with the
prospective economic and trade impact of the change of
government in the US adding to uncertainties.
Internal factors, including high interest rates, energy costs
and increasing labour costs also continue to weigh on
financial conditions and hinder construction activity and
investment plans. “After [declining in] 2023, 2024 will
have been the industry’s most difficult year since 2020,”
says Euroconstruct. “However, forecasts point to a
positive turnaround from 2025 onwards.”
According to new estimates, construction activity in the19
Euroconstruct countries is projected to have declined by
2.4% in 2024. Growth in 2025 is expected to be 0.6%, but
the upward trend is forecast to gain momentum in the
following two years.
“This forecast represents a modest upward revision for
2024 by 0.3 percentage points compared to previous
estimates, though the growth in 2025 is slightly weaker
than initially anticipated, while the growth path for 2026
remains unchanged,” says Euroconstruct.
The primary challenge for the European construction
market in 2024, it adds, was the significant decline in new
residential construction, following that recorded in 2023.
“High property prices, still elevated interest rates (albeit
declining) and high construction costs are the main
obstacles,” says Euroconstruct”.
However, the sector is anticipated to stabilise in 2025 with
growth accelerating in the following years.
The residential renovation market was also in contraction,
with a modest decline this year and a further decrease
forecast next year.”
The improvement in the housing sector forecast from 2026
onwards, says Euroconstruct, will be driven by
demographic factors, economic conditions and more
favourable subsidy schemes for house renovation.
The European non-residential construction sector has also
faced challenges with the modest decline experienced in
2023 expected to have continued through 2024.
“Despite the challenges, however, growth is projected to
resume, starting from 2025, with both new non-residential
construction and renovation activities contributing
positively to the overall sector,” says Euroconstruct.
“New investment prospects will be particularly bright for
the mainly public-funded market segments, while
incentives and structural policies targeting ‘green goals’
will create consistent push for renovation activities across
the sector.”
A particular bright spot for the European construction
sector remains civil engineering. This, says Euroconstruct,
is being driven by the urgent need for upgrades in
transport networks and energy infrastructure.
“Investments in these areas are crucial to meet new
demands and political goals,” it says. “New civil
engineering projects are expected to grow significantly in
the next two-year period, against a more stable and
moderate development for renovation works.”
According to the Euroconstruct report, of the
Euroconstruct countries, strongest construction
improvement in 2025 will come in Ireland with growth of
6%, followed by Norway at 5.6%, Sweden, 5.3%, Finland
and Poland, both at 4.9%, Spain 3.5%, the UK 2.9% and
Hungary 2.8%.
While improving on its performance in 2024, Germany’s
building industry is expected to contract a further 1% in
2025, while the downturn in Italian construction is
predicted to deepen with a further 4.8% decline.
But broadly, Euroconstruct concludes, despite continuing
market constraints, European construction will be on an
upward curve in coming years, with ‘public support for
refurbishment projects and significant investments in
infrastructure the key drivers of more positive trends’.
See: https://www.euroconstruct.org/reports/
Danish timber building grouping launched
A new alliance, the ‘Partnership for wood in Danish
Construction’, has been launched to promote sustainable
building solutions based on timber in Denmark. Its aim is
also to contribute to ongoing environment-focused
revision of the country’s building regulations.
According to a report in the latest European Timber Trade
Federation newsletter, the partnership comprises three
timber industry organizations – the Danish Timber Trade
Federation, Træ i Byggeriet (Wood in Construction), and
Træ- og Møbelindustrien (Danish Confederation of
Woodworking Industries).
In 2021, a Danish national strategy for sustainable
construction was concluded and was followed up in May
2024 by a political agreement that significantly tightens
the climate requirements for new construction. The Danish
Timber Trade Federation says this has created ‘a unique
opportunity to promote timber construction as a
sustainable solution’.
Among the group’s projects are analysis of building
regulations to identify and address barriers for timber and
bio-based building solutions. It will also contribute to a
new ‘biogenic fire bank’ that seeks to build a
comprehensive database of fire safety data and
experiences with timber and bio-based materials.
The fire bank project is backed by the philanthropic
organisation Realdania. The aim is to promote the safe and
effective use of biogenic materials in building and it
involves a wide range of stakeholders within Denmark's
construction industry. “Timber is a renewable resource
with fantastic properties that can contribute to a greener
construction industry,” said Jakob Rygg Klaumann,
Director of the Danish Timber Trade Federation.
“Together with our partners, we will work to pave the way
for more timber and wood-based materials in the building
sector.”
“Our ambition is to create a construction industry where
timber and bio-based materials play a central role. This
partnership is a critical step towards a more sustainable
future,” stated Lauritz Rasmussen, Head of Secretariat at
Wood in Construction.
See: https://dktimber.dk/
EU timber sector welcomes EUDR postponement
European timber companies and trade organisations have
expressed relief that the EU Parliament has voted through
the one-year deferment of implementation of the EU
Deforestation Regulation (EUDR).
They say having another 12 months will enable them
better to align business management and administrative
systems to the requirements of the Regulation and access
the online platform where EUDR compliance information
and data will be collated.
The EUDR was to have to come into force at the end of
December 2024. Large operators and traders now have
until December 30 2025 to comply, while micro- and
small enterprises have until 30 June 2026.
The European Commission proposed the deferment in
October 2024 and the proposal was supported by the
European Council. At the same time MEPs voted through
a range of amendments to the EUDR the most significant
was a change to the Regulation’s supplier country risk
benchmarking. This was later dropped.
The EU has committed to finalising the benchmarking
system six months prior to EUDR implementation. The
EUDR IT system, which companies can work with, is set
to be in its final form by that date.
The European Commission has also pledged to “continue
providing further clarifications on the legislation and
explore additional simplifications, in full compliance with
the objectives of the Regulation, through updates of the
guidelines and the frequently asked questions document.”
It has additionally committed to establishing “a stronger
international cooperation framework to support global
stakeholders, member states and third countries in their
preparations for the implementation of the EUDR.”
Commenting on the final vote to delay the introduction of
the EU, Silvia Melegari, Secretary General of the
European woodworking industries confederation CEI-Bois
said “this postponement is very much welcomed by the
European woodworking Industries as it will allow
operators to be prepared in terms of their due diligence
obligations. As industries we are also very pleased that the
EU Commission has published the revised Q&As for the
EUDR and the guidelines and promised to continue to
update these documents in order to smooth
implementation. In the coming months CEI-Bois will
continue to engage on behalf of our industry in
constructive dialogue with the Commission in order to
solve any remaining problems and/or allay any remaining
doubts.”
Once the supporting systems are in place and streamlined,
some in the timber sector say they do see the EUDR
ultimately providing opportunities in the marketplace.
See::
https://environment.ec.europa.eu/topics/forests/deforestation/reg
ulation-deforestation-free-products_en
https://eur-lex.europa.eu/legal-
content/EN/TXT/?uri=OJ:L_202403234
https://circabc.europa.eu/ui/group/34861680-e799-4d7c-bbad-
da83c45da458/library/b52a6d25-e365-4301-a90a-
59cf7ce2e8d3/details?download=true
https://www.cei-bois.org/
and
https://www.euractiv.com/section/eet/opinion/a-note-to-the-eu-
the-european-deforestation-regulation-is-delayed-but-this-isnt-
time-to-relax/
EUDR information system promises training
As reported in the December edition of the European
Timber Trade Federation newsletter, the law implementing
the IT system for administration of the EU Deforestation
Regulation promises that users will be given training and
support in its operation.
The system is now open for use for businesses to upload
EUDR due diligence statements that products being placed
on the EU market are not implicated in deforestation or
forest degradation, plus the geolocation coordinates for the
source of supply, which are also required under the
EUDR.
This is intended for companies to get accustomed and
adapt their administrative systems to using it prior to its
use becoming obligatory on implementation of the EUDR
at the end of December 2025. The lead-in period is also
seen as facilitating further fine-tuning of the system.
The law implementing the IT system states that the
European Commission will “ensure provision of
knowledge, training and support, including technical
assistance, to users and stakeholders of the system
regarding its operation”. It will also provide web services
“enabling users of the system to submit and manage due
diligence declarations in the information system in an
automated manner” and “provide an electronic interface”
for the IT platform.
See: https://eur-lex.europa.eu/legal-
content/EN/TXT/HTML/?uri=OJ:L_202403084
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