Recently, ING (ING Group) released a report on the European construction industry, which pointed out that European construction is expected to see a moderate recovery in 2025, but after a 2% decline in 2024, the growth rate is expected to reach only 0.5%.

Although the growth was described as "negligible," the report still highlighted well-performing indicators such as rising house prices and stable construction volumes, which are signs that the European construction industry is slowly improving.

Since 2023, house prices within the EU, after experiencing a sustained one-year decline, began to rise again in 2024, reaching a price peak in the third quarter. The report noted that this trend is encouraging for new development projects, as the cost gap between new homes and existing homes is narrowing.

However, challenges remain for countries such as Germany and Spain, where high costs make new homes less competitive. By contrast, the Netherlands stands out, with new home prices becoming increasingly attractive to buyers, which also enables developers to afford rising material costs.

Labor shortages remain a pressing issue. Nearly a quarter of EU construction companies believed there was a worker shortage in December 2024. Although this proportion is lower than the 32% of the previous year, the report attributed the problem to an aging workforce and emphasized the need for industrialization and digitalization to improve efficiency.

Infrastructure is considered a key driver of growth, and investment in digital infrastructure, power grids, water plants, and the energy transition will support the construction industry's recovery. Countries such as Spain and Poland are benefiting from the EU Recovery Fund; Spain has been able to advance delayed projects, and Poland is preparing to launch railway and highway development projects after removing regulatory barriers. As a leading indicator of infrastructure growth, the rate of project starts is also rising, indicating further progress in the infrastructure sector in 2025 and 2026.

The pace of construction recovery also varies across regions. Germany's construction industry faces stagnation, with no growth expected for a fifth consecutive year, while France's output is expected to decline by 1%. By contrast, countries such as the Netherlands and Turkey show stronger growth potential, driven by improved demand and opportunities for price increases.

Although challenges such as labor shortages and weak demand remain, the ING (ING Group) report believes that the industry has reached its lowest point and is now in a phase of slow but steady recovery.