EU construction decreased by 0.4% y/y in May

In May 2023, production in the construction sector of the European Union decreased by 0.4% compared to the same period in 2022. This is evidenced by Eurostat’s data.

Compared to April 2023, seasonally adjusted production in the EU construction sector increased by 0.2% in May.

Among EU countries, the largest monthly decline in construction was recorded in Hungary (-1.7% m/m), Bulgaria (-2.8%) and Austria (-2.5%). The greatest growth was observed in Slovakia (+5.5% m/m), Romania (+3.7%) and Slovenia (+3.7%).

The construction of engineering structures in the EU increased by 0.4% m.o.m. and by 3% y/y, while the construction of buildings (residential and non-residential) increased by 0.2% m.o.m., but decreased by 0.9% y/y.

As GMK Center reported earlier, in April 2023, the production of construction sector of the EU decreased by 0.1% compared to the same period in 2022. The construction of engineering structures decreased by 0.7% y/y, and the construction of non-residential and residential buildings increased by 4.6% y/y.

The slowdown in the EU construction market has begun since March, when the indicator fell by 1.2% y/y and 1.9% m/m. In particular, in January, EU construction production grew by 3.3% y/y, and in February – by 1.4% y/y. Thanks to the successful start of the year, the quarterly indicator managed to increase by 0.4%, despite a significant drop in March.

Stagnation of the EU construction sector has a negative impact on demand and sentiment on the domestic market of long-term rental. Since the end of 2020, construction in the European Union has been in a long period of recovery thanks to significant government support, which stimulated demand for steel products, but since the beginning of this year, the European construction sector has suffered due to macroeconomic problems and uncertainty in the market.

According to Eurofer forecasts, in 2023 European construction activity will decrease by 1.6% compared to 2022.