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Blogs I published 09 July 2024

Non-residential Construction Forecast for 2024

The cityscape is an active organism with an ever-changing skyline. You see the well-known scenery just by stepping out of your home: cranes along the skies, scaffolding clinging to buildings and construction equipment as a soundtrack to our urban spaces. Constant transformations of our surroundings aren’t a cosmetic whim, but a clear indication that our needs and priorities change, and with them – our ways of life.

While 2023 has seen robust and somewhat unexpected growth, 2024 is expected to shift gears and head into a slight decrease in building volumes across a majority of European countries. So let’s go over upcoming industry trends and underlying factors that influence these dynamics.


construction site


Prognosis and State 

Our metrics show that 2024 faces certain pressures and will be a year of adjustments. With reference to 2023, a noticeable slowdown will befall European construction (most noticeably in the UK and Germany, with -3.8% and -2.5% respectively). While not necessarily as extreme in all countries, these changes are mostly due to a decreasing volume of newbuilds, along with other long-term indicators, like building permits. 

This shift in the 2024 market is impacted by a number of other aspects, many of which already surfaced in 2023, so below we’ve prepared a short overview to keep you in the loop.

Interest Rates 

A significant bump in the road is rising interest rates, and it’ll be an ongoing challenge for construction. Funding new projects has become more expensive and higher financing costs will inevitably dictate development pace, especially hurting newbuild. Streamlining construction will require some finesse, so keep an eye out for alternative opportunities. 

Material Prices

Despite a moderate decline, the industry still acutely faces higher material prices. In the past two years, the global humanitarian crisis (the Russo-Ukrainian war) has had a profound impact on the market and construction experienced a significant disruption in supply chains.

Labour Shortage

Along with the challenges mentioned above, the non-residential construction industry grapples with an ongoing labour shortage. This is by no means a new issue, but it’s become particularly evident in recent years, spiralling into an increase of labour costs. By addressing this gap head-on, the industry can ensure it has the skilled workforce needed to navigate future challenges and maintain a healthy pipeline of talent.

Uncertainty About Economic and Political Development

Steering away from material product prices, a growing concern about the European economic and geopolitical landscape certainly ripples out to construction. This can cause hesitation to commit to large-scale construction projects. Geopolitical tensions, inflationary pressures, an unstable economic environment and government regulation all turn into unforeseen challenges, eliminating informed decision-making.

Sustainability Decline

Despite efforts to swiftly tackle climate change, we’re seeing an unfortunate drop in sustainability, namely its level of adoption in construction practices (e.g. heating systems). Combined with the aforementioned factors, or rather due to their synergy, a heavy influence over the market is more than evident.

Peak Bias

Considering a stellar 2023, the stats on 2024 don’t seem all that impressive. But this is only because the 2023 boom exceeded expectations in many ways. The building volume for 2024 may be lower, but this doesn’t necessarily translate to a failing industry. Instead, it underlines that the recent experience was an unrealistic benchmark, so current trends may represent a return to a more regular growth pattern. 


construction workers


2025 Coming Up Strong

It’s not all bad news. Research so far suggests an upcoming rebound, with the construction industry again expecting growth in 2025. So compared to 2024, an increase of total production is projected throughout European countries (Netherlands +1% France +2%, Germany +3%, Italy +3.9%, Spain 6.0%), with the exception of the UK (expected to continue a downward trend of another -2%). Here’s what’s driving the upswing.

Affordable Housing

Northern Europe is faced with a unique and pressing shortage of housing. The construction timelines can only be postponed so long before projects are carried through to completion, and 2025 is expected to see a surge in project finalization to address this critical need. By tackling the housing shortage, 2025 could mark a significant step towards a more equitable and inclusive housing market, while serving as a model for other regions facing similar challenges.

Drop in Material and Building Costs

What’s stifling 2024 will most likely loosen its grip come 2025, so the overall costs of construction will be impacted greatly. Lower material and building costs, coupled with a stabilized supply chain, will significantly impact construction budgets.

Interest Rate Drop

An anticipated decrease in interest rates will be a welcome catalyst for new builds and overall housing market activity. Lower borrowing costs will make it more affordable for developers to secure financing for new projects, ultimately leading to an increase in construction starts. Additionally, lower interest rates will incentivize potential homeowners to take out mortgages, boosting demand for newly built properties

Sustainability Uptick

After a noticeable slump in 2024, we expect to see a renewed focus on sustainable construction practices. This means investors are swaying towards projects committed to eco-conscious efforts, energy-efficient technological advancements, boosted by favourable government incentives. Stay tuned for these developments.

Renovation Gaining Momentum

The sector is poised for a renovation wave. This trend could lead to a revitalization of existing structures, fostering a more sustainable and cost-effective approach to non-residential construction in 2025.


construction site



While 2024 might be a year of tightening belts, it’s not a sign of total stagnation. It’s a year of recalibration, a chance to address long-standing challenges and embrace innovative solutions. As we move into 2025, the forecast brightens with the promise of lower costs, renewed focus on sustainability and a surge in affordable housing projects. The construction industry is poised for a transformation, not just in the buildings it creates, but in its approach to the ever-evolving urban landscape. Stay tuned – the future of non-residential construction is about to get interesting.



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