In 2025, industry indicators are expected to recover – by 2% per year
EUROFER, the European steel association, predicts a 0.4% decline in EU construction in 2024 compared to 2023, when there was a 2.1% annual decline (previous expectations). However, a positive growth trend of 2% per year is expected next year. This is stated in the EUROFER 2024-2025 economic and steel market outlook, first quarter.
“Rising prices for construction materials, together with labor shortages in some EU countries, increased economic uncertainty and rising interest rates, have affected construction volumes in the EU. This negative trend is expected to continue until the first half of 2024, mainly due to the impact of further tightening of monetary policy in a context of higher mortgage rates and weak demand for housing», states the report.
In 2023, housing construction suffered a decline due to the tightening of monetary policy by the European Central Bank (ECB) to contain inflation. However, a more positive trend was observed in civil engineering, which proved to be resilient under these conditions, but still failed to compensate for the decline in residential construction.
According to EUROFER forecasts, in 2024, civil construction will continue to grow, but at a slower pace due to the reduction in public spending.
«Governments are using state construction programs as one of the measures to support industry after the 2020 recession caused by the COVID-19 pandemic. However, in 2024, the impact of these programs will be significantly reduced due to a number of negative factors, such as the shortage of construction materials, their price increase and the reduction of financial opportunities for construction in the EU", notes the association .
As for the private non-residential construction segment (offices, commercial buildings, etc.), the depressed investment prospects for the business remain unfavorable in the near future due to instability in the business environment.
As the GMK Center previously reported, according to EUROFER forecasts, apparent steel consumption in the European Union is expected to decrease by 6.3% in 2023 compared to 2022, to 129 million tonnes. At the same time, in 2022, the number decreased by 6.5% y/y and in 2024 it is expected to grow by 5.6% y/y.
