Spain's construction rebounds while EU sector stays flat in 2026

Across Europe, construction activity is likely to stay muted in 2026 as borrowing costs stay high and material prices remain elevated, keeping residential building under pressure. The EU as a whole is projected to grow a mere 0.5 % in output, with infrastructure and renewable-energy projects providing the only notable support. Spain diverges from the trend, with analysts forecasting a 3 % rise in construction output after a more than 25 % drop from 2019 to 2022, although housing permits have slipped nearly 2 % in the latest quarter.

The Spanish market also faces heightened risk from cost overruns because many public contracts lack mechanisms to adjust prices. Meanwhile, France is expected to contract by 2.5 %, Germany may see a modest recovery after five years of decline, and Poland is projected to stay flat before improving in 2027. The United Kingdom is excluded from the EU-specific outlook.