Construction in the EU fell by 1% m/m in May

Production in the construction sector of the European Union in May 2024 fell by 1% compared to the previous month. Compared to May 2023, the seasonally adjusted figure decreased by 2.5%. This is evidenced by preliminary data from Eurostat.

Among the EU countries, the largest monthly decline in construction in May was recorded in the Czech Republic (-5.1% m/m), Romania (-4.1% m/m) and Hungary (-3.8% m/m). The highest growth was observed in Finland (+1.9% m/m), Bulgaria (+1.1% m/m), and Spain (+0.3% m/m).

Construction of engineering structures in the EU fell by 1.5% m/m and 0.8% y/y over the month, while construction of buildings (residential and non-residential) decreased by 0.9% m/m and 4.8% y/y.

According to the final data for April 2024, production in the EU construction sector remained stable compared to the previous month. The construction of engineering structures decreased by 0.4% m/m over the month, while the construction of buildings (residential and non-residential) increased by 0.6% m/m.

The overwhelming stagnation in the EU construction sector is having a negative impact on demand and sentiment in the domestic long products market. Since the end of 2020, construction in the European Union has been in a long period of recovery thanks to significant government support, which has stimulated demand for steel products. However, since the beginning of 2023, the European construction sector has been suffering due to macroeconomic problems and market uncertainty.

Average annual production in EU construction in 2023 increased by 0.1% compared to 2022.

According to Eurofer forecasts, in 2024, the volume of construction in the EU will decrease by 0.4% y/y. However, a positive growth trend of 2% y/y is expected in 2025.

In 2023, housing construction experienced a decline due to the tightening of monetary policy by the European Central Bank (ECB) to curb inflation. However, more positive dynamics were observed in civil construction, which proved to be resilient to these conditions, but still could not compensate for the decline in residential construction.