Construction in the EU increased by 1.3% m/m in December

Production in the construction sector of the European Union in December 2023 increased by 1.3% compared to the previous month. Compared to December 2022, the seasonally adjusted figure increased by 2.4%. This is evidenced by preliminary data from Eurostat.

The average annual production in construction in 2023 increased by 0.1% compared to 2022.

Among the EU countries, the largest monthly decline in construction in December was recorded in Slovakia (-10% m/m), Germany (-3.4% m/m) and Austria (-1.9% m/m). The highest growth was observed in Romania (+10.3% m/m), Poland (+8.5% m/m), and Hungary (+5% m/m).

The construction of engineering structures in the EU increased by 1.1% m/m and 0.5% y/y over the month, while the construction of buildings (residential and non-residential) increased by 1.4% m/m and decreased by 2.4% y/y.

According to the final data for November 2023, production in the EU construction sector fell by 0.5% compared to the previous month. The construction of engineering structures in the EU fell by 0.2% m/m and increased by 0.5% y/y over the month, while the construction of buildings (residential and non-residential) fell by 0.6% m/m and 2.4% y/y.

The stagnation of the EU construction sector has 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 due to macroeconomic problems and market uncertainty, according to steelmakers.

Eurofer forecasts that in 2024, construction volumes in the EU will decline 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.