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6 Mar 2025
Construction industry outlook 2025/2026- Atradius
Despite the ongoing challenges in China’s real estate sector and high interest rates continuing to impact mortgage rates in Europe and the US, the outlook for the industry is not all doom and gloom. We
expect to global construction output to increase by 2.3% in 2025 and by 3.3% in 2026.
Of course, we can’t ignore the fact that China’s ongoing real estate turmoil and downgraded investment profiles are weighing on global residential construction prospects. In Europe and the US high interest and mortgage rates have squeezed household budgets and reduced demand last year. However, falling inflation and recent interest rate cuts will begin to alleviate some of the pressure. The lagged impact of interest rate cuts means that the uplift in activity will be slow to begin with, gaining momentum in H2 of 2025. Civil engineering and non-residential building saw robust growth in both 2023 and 2024. Both segments benefited from the willingness of governments worldwide to champion major infrastructure projects and industrial policies in a bid to boost their economies. However, growth rates will be lower in 2025 and in 2026, as the impact of austerity measures in certain countries continues to be felt.