The European Union’s construction output dropped by 0.4% year on year in the second quarter of 2024, according to the Economic and Steel Market Outlook 2024-2025, Q4 report from the European Steel Association (EUROFER).

The decline is attributed to rising material costs, labor shortages in some EU countries, and increasing economic uncertainty. Construction investment also decreased by 1.7% year on year in the second quarter, following a 2.3% drop in the previous quarter. Residential construction investment has now fallen for nine consecutive quarters, down by 4.1% due to persistently high mortgage rates.

EUROFER projects this negative trend to continue through the end of 2024, with an anticipated 1.3% contraction in annual construction output, a slight improvement from the previously forecasted 1.4% decline. However, EUROFER expects the sector to return to growth in 2025, with an estimated 1.3% increase, supported by a potential easing of monetary policies.