Construction and Real Estate in Western Europe

October 2020

In 2019, Western European construction recorded output of USD4,588 billion despite a slight slowdown in major economies. The COVID-19 crisis in 2020 and related uncertainty led to residential and commercial construction contracting. Rising infrastructure spending as part of corona-recovery packages is set to compensate only partially for the decline in construction over 2019-2024. SMEs will continue to dominate the construction sector despite the financial challenges arising from the pandemic.

USD 1,325
Request More Information

Key findings

Residential and commercial construction to remain subdued

Western Europe saw slow growth in the latter part of the review period, dragged down by slower economic growth across major EU countries, foremost Germany and the UK. The UK has seen shrinking commercial construction since the Brexit referendum in 2016, and continues facing diminishing construction demand in the wake of the COVID-19 pandemic and economic downturn. Residential and commercial construction are set to see weak demand over 2019-2024, given elevated uncertainty, low consumer and businesses confidence, and rising unemployment.

Near-term recovery to be driven by expanding infrastructure projects

In the context of deteriorating residential and commercial construction demand across the region, rising infrastructure spending is expected to provide some support for the construction industry. As part of corona-recovery packages, Western European countries are planning major investment in infrastructure developments, alongside some regulatory adjustment allowing for quicker and more flexible infrastructure planning systems. Additionally, the lion’s share of the EUR750 billion EU corona recovery package is set to support infrastructure development.

SMEs continue to dominate the construction sector in Western Europe, but faces financial challenges in the wake of COVID-19

The Western European construction sector is largely dominated by small and micro companies, generating as much as 70% of total output in Germany, Italy and France. The COVID-19 crisis has, however, hit these companies significantly, as construction sites were closed, and others lacked workforce to complete projects on time, thus delaying payment. SMEs are expected to be supported by government financial incentive programmes to avoid insolvency issues; nevertheless, problems will continue as recession limits potential revenue growth, and disrupted supply chains will remain a challenge for small companies.


Key findings

Production Outlook

COVID-19 crisis drags down construction outlook in Western Europe
Infrastructure to support recovery but uncertainty to remain high
Reluctance to buy property to facilitate residential real estate activities
Construction industry will struggle in the short term
Turkey to sustain solid growth, supporting regional recovery
Real estate activities to gain momentum while construction struggles

Competitive Landscape

SMEs lead the market, but face the biggest challenge in history

Country Snapshots

Germany: Production context
France: Production context
UK: Production context
Italy: Production context
Spain: Production context
Turkey: Production context
Turkey: Production context
Turkey: Production context
Netherlands: Production context
Switzerland: Production context
Belgium: Production context
Austria: Production context
Norway: Production context
Sweden: Production context
Denmark: Production context
Finland: Production context
Ireland: Production context
Portugal: Production context
Greece: Production context
Luxembourg: Production context
Iceland: Production context
Cyprus: Production context


If you purchase a report that is updated in the next 60 days, we will send you the new edition and data extract FREE! Home Page