Construction in the EU increased by 0.2% m/m in July

Production in the construction sector of the European Union in July 2024 increased by 0.2% compared to the previous month. Compared to July 2023, the seasonally adjusted figure decreased by 2.4%. This is evidenced by preliminary data from Eurostat.

Among the EU countries, the largest monthly growth in construction in July was recorded in Belgium (+7.7% m/m), the Czech Republic (+6.8% m/m) and Slovenia (+3.2% m/m). The largest drop was observed in France (-2.2% m/m), Slovakia (-1.6% m/m), and the Netherlands (-1.3% m/m).

Construction of engineering structures in the EU fell by 0.7% m/m and 0.4% y/y over the month, while construction of buildings (residential and non-residential) fell by 0.2% m/m and 4.6% y/y.

According to the final data, in June 2024, production in the EU construction sector decreased by 0.3% compared to the previous month. The construction of engineering structures increased by 1.4% m/m, while the construction of buildings (residential and non-residential) decreased by 0.4% 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 EU has been in a long period of recovery thanks to significant government support, which has boosted demand for steel products. However, since the beginning of 2023, the European construction sector has been suffering from 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.