5 Trends Shaping European Construction: Evidence Through 2026

The conversations in site cabins, supply chain meetings and architecture studios across Europe are getting deeper. They have less to do with business being up or down and more with what’s likely to outline the sector in the years ahead – the lasting pressures, the viable opportunities, and decisions that need to be made soon.

This overview brings together the original 2024–2025 analysis with newer findings from the European Architectural Barometer and the European Mechanical Installation Monitor 2026. The newest construction-volume table below is the EAB Q2 2026 forecast; it is not a final outcome. Earlier figures remain labelled by their research period, while the 2026 installer findings describe HVAC and plumbing businesses in six surveyed countries.

2024 closed with rattled confidence set on by labor shortages, high material costs, hesitant clients, inflationary pressure and energy volatility. All of this stacked against softening demand and deferred investment. But while the indicators were – to say the least – underwhelming, the story underneath is more nuanced… and for those watching closely, instructive. Let’s look at things from the ground up.

1. Market Overview

The Updated 2026 Construction Forecast

The Q2 2026 European Architectural Barometer forecast points to modest growth in seven of the eight markets shown, with France still expected to contract. This is a newer forecast than the June 2025 outlook retained below.

Source: European Architectural Barometer Q2 2026, as reproduced in the European Mechanical Installation Monitor 2026, Emerging Trends and Media Orientation, p. 16. Figures are forecasts of year-on-year change in total construction volume, not observed full-year outcomes. This table does not provide a revised numerical forecast for 2027.

The 2026 Installer Perspective

The European Mechanical Installation Monitor 2026 offers a more recent view from HVAC and plumbing businesses. In interviews conducted in March and April 2026, 40% expected the global economic situation to decline in 2027, while 16% expected it to improve. Their own businesses looked more resilient in the separate 2026 outlook: 25% expected growth, 49% stability and 17% a decline, with 9% unsure.

Order books averaged 6.6 months, compared with 5.4 months in the report’s Q1 2025 comparison. These figures describe expectations and booked work at the time of interview, rather than measured full-year construction output. The study covered 880 installation businesses in the UK, Germany, France, Poland, the Netherlands and Belgium; its six-country average is not a market-weighted estimate for all of Europe.

The Earlier 2024–2025 Market Context

The construction sector did not just stagnate in 2024… it shrank. And Europe felt the ripple effect. What varied was the degree of contraction and the relative success in softening the blow. Year-on-year construction volume changes were negative in most major markets: Germany saw a -4.5% development, France followed close with -4.4%, Poland -4.3%, while a few markets remained positive (Italy 0.2%, The UK 1.2% and Spain 2.5%).

The causes were systemic: high interest rates, expensive materials, tight labor markets and geopolitical uncertainty. This impacted new build activity particularly hard, with renovation holding up better due to regulatory and energy-efficiency programs.

The 2025 Outlook as Published in June 2025

The 2025 outlook improved modestly, but by no means uniformly. Germany, France and Poland were expected to continue further negative developments, while Spain was forecast at 4% growth, Italy 2% and the UK 1%. What can we chalk it up to?

• declining interest rates fueling demand for new builds
• a stronger renovation market
• an uptick in sustainability improvements
• lower material and building costs
• expected increase in government spending

Still, the total 2025 picture was one of moderate improvement, not resurgence.

Fig. 1: Construction volume change 2024 and 2025 forecast by market.

2. Labor Shortage – A Structural Challenge

The 2026 mechanical installation survey gives this structural challenge a current trade-specific measure: 59% of the surveyed HVAC and plumbing businesses reported a labour shortage. Country results ranged from 40% in the UK to 77% in Germany, with France at 51%, Poland at 64%, the Netherlands at 70% and Belgium at 56%. A further question found that 61% expected shortages over the next five years. These are shares of businesses reporting or expecting a shortage, not percentages of workers missing.

Earlier Findings Across Construction Professions

The following country and profession figures were quoted in the June 2025 overview; they are separate survey populations, not a combined European workforce rate.

Labor pressure isn’t easing, and most construction businesses no longer treat it as a cyclical issue, but a chronic operational constraint. It’s being actively factored into planning, pricing and delivery models. The skills shortage is not speculative. It’s measured and widespread; for instance:

• Germany: 89% of painters and 76% of installers report labor shortages
• Netherlands: 69% of architects and 67% of contractors
• Italy: 47% of painters, 37% of installers

This covers the quantitative labour shortage issues. Beyond mere quantitative concerns, a qualitative labour shortage looms. The impending retirement of experienced workers, rich in both years of service and depth of knowledge and the inflow of less experienced and practically schooled workers, poses significant challenges as buildings and installations become more complex and require more knowledge and skill rather than less.

One of the key ways many stakeholders think they can combat labour shortage short term is to hire non-qualified staff and train them. However, many other industries that face labour shortages employ a similar strategy. Furthermore, the time needed to train non-qualified staff and get them productive is rather high, further increasing the labour shortage issues short term. Are there no other solutions for the labour shortage problems? Yes, there are and we will focus one of them for the next trends.

• cost impact – hourly rates are climbing, adding cost pressure to already expensive builds
• capacity bottlenecks – longer lead times and reduced flexibility to scale production
• productivity drag – a skills mismatch and rushed onboarding of less-experienced workers reduce overall efficiency
• innovation slowdown – high work pressure forces short-term focus (meaning less capacity to invest in training or systems change)

But it’s not all downhill. There’s a growing uptake in mechanised solutions (robotics, automation, AR and AI, mechanical spraying and printing). Demand for prefabricated systems is rising as a means of de-risking site works. Contractors are offering paid training and formalising onboarding in order to rebuild the workforce. So the market may not be correcting itself, but that’s changing how projects are scoped, staffed and delivered.

3. Prefab – Productivity and Project Fit

Prefab adoption flattened due to a slowdown in new build permits, not because of lack of interest or benefit. As new builds fell off, so did the opportunity to use it at scale.

Labor shortages are forcing contractors to look for faster, more resource-efficient methods. Prefab answers that call. The labor benefits alone make it attractive, especially as onsite skill shortages get worse. Prefab can help simplify delivery, control costs and reduce time on site. Today, it’s mostly working with basic elements – panels, sections, and standard modules. More advanced forms like plug-and-play systems and fully volumetric units remain underused mainly because of complexity, design limitations and logistical concerns.

To fully leverage the benefits of prefabrication and to increase the overall productivity levels in the construction industry , a shift towards more industrialized processes is imperative. This entails greater utilization of advanced prefabricated panels and volumetric solutions produced in an industrialized manner. Most of the ‘simpler’ forms of prefab basically entails offsite construction in an onsite manner, which will not bring the big jumps in productivity levels that are needs. For this, more advanced forms of industrialised prefab production are needed.

In order for more advanced forms of industrialised prefab to grow significantly, the industry needs to overcome existing barriers, including technological constraints and regulatory compliance. Furthermore, in order to facilitate more advanced forms of prefab, more digitalisation is needed.

The 2026 HVAC and plumbing findings also show why adoption and intensity need to be separated. Prefab was used by 43.3% of the 880 surveyed installation businesses. Among the 380 prefab users, it accounted for 26.7% of projects on average. The project figure therefore describes existing users; it is not the share of all installation projects or all construction projects.

For dated architect and contractor adoption series, system types and building-height expectations, see our prefab trends guide.

4. BIM and Digital Adoption – Growing, but Uneven

The Q4 2025 European Architectural Barometer records further growth in architectural practice: 53% of the surveyed firms used BIM, while BIM was used in 32% of their total projects. The corresponding 2023 figures were 45% and 25%. This eight-country series covers 926 architectural practices with at least two full-time equivalents. Firm adoption and project use measure different things; 53% must not be read as the share of projects.

Mechanical installers sit at a different stage. In the March–April 2026 survey, 51% were aware of BIM and 15% used it. Among the 132 BIM users, BIM projects generated 21% of turnover. These figures concern HVAC and plumbing businesses and a turnover measure, so they should not be combined with the architect adoption or project-use percentages.

How Digitalisation Reached This Point

For years now, BIM has been pitched as a solution to coordination headaches, waste and inefficiency in the construction process. But the reality is more nuanced than the headlines: yes, it’s widely recognized. Yes, it’s in use. But not always at its full capacity.

For many decades, the design process in the construction industry remained heavily reliant on paper. New digital ways of designing increased the quality of the designs and opened up the way for more complicated designs. CAD software changed the industry, but this change was relatively slow and didn’t tap into the huge potential digitalization of the construction industry could offer.

With the development of BIM (building information modelling), much more is possible. Even in more complicated designs, more parties can be involved, and the design process can be coupled with costs, planning, and many other elements.

Building Information Modelling (BIM) stands as a prime example of digital innovation reshaping construction practices. The earlier research discussed in March 2024 put architect BIM use at approximately 45%, with more than three quarters of Dutch architects using BIM compared with 32% of Italian architects. The newer Q4 2025 results are 78% for the Netherlands and 46% for Italy. The contrast remains substantial, but the dates matter when comparing adoption.

However, even though BIM usage is relatively high amongst European architects, the usage of the more advance features (4D and 5D) remains limited. Furthermore, the level of detail (LOD) which is most commonly specified is LOD 300.

So what’s the real issue? It’s not the software. It’s training. It’s culture. It’s the project structure. BIM can do more than coordinate design – bring together pricing, logistics, sustainability and post-handover performance – but that requires firms to stop thinking of it as a drawing tool and start treating it like a platform for how they plan and deliver work.

Changing Decision-Making Roles

A transformation in the decision-making process within the construction industry is underway. Historically, architects assumed the role of master builders, wielding authority over all project facets. However, evolving dynamics, including heightened building complexity and expanded stakeholder influence, redefine the architect’s role. Architects increasingly pivot towards project management, prioritizing aesthetic design and material selection over brand preferences.

This shift reflects broader industry trends towards collaborative decision-making and greater stakeholder involvement. ‘New’ players, such as major prefab producers and innovative construction firms employing design-build practices further erode the central role of the architects. Furthermore, the ‘end users’ or the principles assign the projects are more involved in the design and building process.

The increased complexity of the decision making process and the amount of actors sitting at the table earlier, also requires better cooperation. Again, BIM is an important tool to facilitate this.

Emerging Technology: the Q2 2024 Architect Perspective

All this – and more – we covered in Q2 2024 European Architectural Barometer Report, taking a close look into solutions that will greatly impact the industry. Published in August, the report features insights across 8 European countries, outlining the upcoming focus of architects.

The construction industry is, we well know, notoriously traditional and slow to adapt. When asked about what’s driving the industry, architects think about brassbound trends: it’s all about sustainability (22%), resource-efficient materials (20%) and off-site construction (14%), with innovative technology having yet to gain traction. A.I. was, for instance, ranked 6^th in terms of anticipated trends, with only a shy 11% mentioning it spontaneously. While our stats show 6-7 spiking trends that will shape a decade of construction, it’s important to note that many architects – some 70% of them when prompted – also mention other factors than the ones included in the overview.

Despite the buzz surrounding A.I, drone tech, nanotech, augmented reality, robotization, blockchain, 3D-prints… architects are keeping them on the sidelines. On a wider scale, most are overwhelmingly ignored, with only IoT ranking 6^th in ongoing projects (with 29% of all European architects mentioning that this is already strongly or very strongly considered in their projects). The trends preceding it are stricter regulations (61%), green buildings (55%) and off-site construction (37%). Consideration of the rest – say, blockchain, robotization and nanotech – seem far down the line, with over 50% of architects claiming, when prompted directly, not to consider them at all.

These findings describe what architects mentioned or considered in Q2 2024. They are not current adoption rates for AI, robotics or other technologies.

5. Sustainability – Going Green?

Amid mounting concerns over climate change and resource depletion, sustainability has gotten heightened attention within the construction sector. Efforts to reduce carbon emissions and enhance energy efficiency are at the forefront of sustainability initiatives. Legislative measures aimed at promoting sustainable building practices further underscore this shift. However, despite growing awareness and regulatory impetus, the pace of sustainable adoption remains gradual. Intrinsic motivations among key stakeholders often lag behind regulatory mandates, hindering widespread adoption. Also, the high costs of more sustainability remains a barrier.

The 2026 mechanical installation findings put a number on that tension. HVAC and plumbing installers reported that sustainability was taken into account in 33% of projects, compared with 40% in the 2025 wave. This is a reported project share within that trade, not a measure of consumer willingness to pay or the proportion of all European building projects.

Client Interest and Investment

Sustainability has become a default talking point: it’s on the tender documents, in client pitches, on grant specifications and packaging. But when it comes to execution – and more importantly, investment – follow-through can be more limited.

For the distinction between sustainable ambitions and investment decisions, see our analysis of client investment in sustainable construction.

Material Choices and Circularity

For the Q1 2024 material-use expectations and country differences, see our construction material-use analysis.

Sources for the new figures: European Mechanical Installation Monitor 2026, Emerging Trends and Media Orientation, pp. 17–18 and 21–25; European Architectural Barometer Q4 2025, BIM and New Digital Tools, pp. 53–55. The installer survey used separate samples in each wave and balanced company-size groups within countries. Earlier sections retain their stated research dates.

Conclusion

This all translates to smarter project scoping, tighter coordination, better use of tech and realistic financial planning. In other words – knowledge. So, if you want a closer look at the trends or need data specific to your market – check out USP’s reports, tailored to every link in the construction chain.