Spanish construction stands out from the European slowdown and will grow 4% in 2025

The construction sector in Spain will close 2025 with growth close to 4% year-on-year, one of the best records since the 2008 financial crisis, and will be well above the large European markets, still immersed in a phase of stagnation. This is stated in the report ‘Euroconstruct Winter 2025: The Spanish construction sector, against the current’, prepared by the Institute of Construction Technology of Catalonia (ITeC) in collaboration with the Federation of Construction Guilds, which highlights the differential position of Spain in the current European cycle.

According to the report presented this Tuesday, “the Spanish construction sector is experiencing a period of great dynamism, with indicators that show a clear upward trend.” The confidence indices at all-time highsthe construction cost stability and the turn of monetary policywith interest rate cuts, are creating a favorable environment for investment. Added to this is a transversal acceleration of real estate activity, both residential and non-residential, ranging from large corporate operations to the retail market.

By subsectors, the residential will once again be the main driver of growth in 2025, with an estimated advance of between 5.5% and 6%, in a context marked by the structural housing shortagethe revaluation of prices and a greater prominence of the public promotion. The civil Engineering will grow around 3%, maintaining its role as a shock absorber of the cycle, although the report warns that this momentum could lose intensity in the coming years as the effect of the European Next Generation EU funds is diluted and budgetary restrictions increase. The rehabilitation will advance in a more moderate way, between 1% and 2%, still benefiting from the last sections of the aid programs, while the non-residential will limit its growth to 0.8%, reflecting the absence of urgency to create new stock despite the attractiveness of Spain as an investment destination.

The good performance of the Spanish market contrasts with the situation in Europe as a whole. According to Euroconstruct, the macroeconomic environment “still far from optimal”: Private investment continues to be held back by global uncertainty, high construction costs and the affordability gap, despite moderating inflation and lower interest rates. After reaching record production levels in 2022the European sector entered a negative parenthesis that has extended through 2023 and 2024 and that, in part, will still affect 2025.

For this year, the aggregate production of the sector in Europe is expected to be practically stagnant, with a growth of 0.3%before entering a three-year period of more “normalized” recovery starting in 2026. In this context, Germany, France and Italy They are among the markets with the greatest difficulties in leaving behind the recession of the 2023-24 biennium. Germany, in particular, will remain the only major European country with a clearly lagging recovery, while Spain, United Kingdom and Poland They remain at the top of the growth ranking.