In 2025, overall economic conditions in Europe remained subdued. Gross domestic product expanded by around 0.9 per cent, while investment activity continued to be restrained and private consumption showed only limited growth. Although interest rates stopped rising and began to stabilise, they remained above pre-2022 levels, continuing to weigh on residential construction and property investment.
Against this backdrop, the European construction sector developed unevenly. Residential building activity remained weak across most major markets, reflecting the ongoing housing downturn. By contrast, civil engineering and infrastructure construction recorded growth of approximately 3 per cent, offsetting the decline in building construction. As a result, total construction output remained broadly stable year on year. Infrastructure investment continued to act as a stabilising factor for the construction equipment market.
Overall, 2025 represented a transitional year for the European construction equipment industry. The moderate sales growth of 4.6 per cent indicates a halt to the previous contraction, but growth drivers remained limited and closely linked to public infrastructure spending.
For 2026, the outlook points to further, albeit moderate, expansion. Sales are expected to grow by around 2 to 2.5 per cent, supported by stabilising interest rates, a gradual recovery in private investment and the continuation of infrastructure programmes. A recovery in residential construction, following two years of decline, is anticipated to contribute to this development. Additional momentum is expected from investment related to infrastructure modernisation and the energy transition.
However, the sector’s performance in 2026 will depend largely on macroeconomic conditions and public investment policies rather than on a broad-based resurgence in private demand. Structural challenges remain, including regulatory complexity, competitive pressures and uncertainties in key export markets such as the United States. Addressing these issues will require coordinated action between industry stakeholders and policymakers at European and national levels.
