According to the Economic Committee of the European Steel Association (EUROFER) Steel Market Outlook 2025-2026/Q4 2025 report, EU construction output recovered slightly in the second quarter of 2025, up 0.1 percent year-on-year.
As expected, residential investment, which is highly sensitive to interest rates, fell in the second quarter. 11th consecutive quarter down
The ongoing uncertainty in the sector is expected to continue into the first half of 2026, mainly because the positive impact of lower interest rates will take time to materialize. Additional monetary easing remains possible, but will depend on how prices develop in the coming months. Reflecting real output trends, the fragility of the sector is also evident in the latest quarterly construction investment figures, which posted weak year-on-year results for the fifth consecutive quarter in the second quarter of 2025.
The sector is forecast to grow only modestly in 2025 (+0.1%, previously estimated as flat) as housing demand continues to decline. A stronger rebound is forecast for 2026 (+2.2%, slightly revised from +2.3%), largely supported by the expected impact of monetary easing
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