The European construction industry is expected to accelerate significantly, with real growth forecasts of 2.4% in 2026, 2.2% in 2027, and 1.9% in 2028, according to the Ifo Institute as part of the Euroconstruct research group. This follows a modest 0.3% expansion in 2025.
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Residential and civil engineering sectors are projected to lead growth, with total market volume rising by around 7.5% between 2025 and 2028 due to regional housing shortages and major investment needs in transport and energy infrastructure. However, Dorffmeister of Ifo cautions that special funding measures may only partially benefit the German construction industry, mainly supporting rail projects.
Other building construction segments are forecast to grow by 4.7% by 2028, driven largely by public sector projects in education and healthcare, while private sector activity remains constrained by location and economic factors. Renovation of existing properties continues to dominate investment, representing over 60% of residential expenditure and increasingly shaping non-residential building trends.
Analysts emphasise that improved economic conditions, including wage growth and interest rate adjustments, underpin this momentum, signalling a robust multi-year recovery for Europe's construction markets.
Source: www.moebelmarkt.de
