FIEC Newsletter – 7 Ιουλίου 2026

Europe’s construction sector is showing the first signs of recovery after two consecutive years of contraction, but the latest FIEC Statistical Report stops short of describing a broad-based rebound. Investment is expected to grow again in 2026, yet the market remains split between resilient infrastructure activity and building segments still held back by financing costs, high construction prices and cautious private demand.In 2025, total construction investment in the European Union fell by 2.1% in real terms, following a 2.5% decline in 2024. FIEC forecasts a 2.7% increase for 2026. That positive turn matters for sentiment, but it does not erase the losses of the previous two years or the differences between countries and market segments.

The chart captures this uneven recovery. Civil engineering has moved clearly ahead of the rest of the sector, supported by transport, energy and water infrastructure, as well as national and European funding programmes. FIEC expects it to remain the strongest segment in 2026, with growth of 4.1%.

Building activity is improving more cautiously. New housebuilding is forecast to rebound in 2026, but from a very low base after several years of weakness. Renovation and non-residential construction should also return to growth, although gradually, suggesting stabilisation rather than a rapid expansion.

Overall, the report points to cautious optimism – but not certainty. The sector enters 2026 in a better position than a year earlier, yet the durability of the recovery will depend on financing conditions, public investment capacity, the absorption of EU funds, permitting procedures, labour availability and the financial resilience of construction companies. A further note of caution comes from recent instability in the Middle East and disruption to global oil and gas supply chains: if these pressures persist, higher energy, transport and manufacturing costs would almost inevitably feed inflationary pressure across construction materials, from cement and steel to glass, plastics and other energy-intensive inputs.

FIEC Statistical Report 2026

On 1 July, Ireland took over the Presidency of the Council of the EU under the motto “Strength through Unity”. It’s programme places competitiveness at the heart of the EU policy agenda, with housing, regulatory simplification and industrial policy among the priorities most relevant to the construction sector.Key initiatives for the construction industry include advancing the European Affordable Housing Plan, simplification measures to accelerate permitting procedures, reform of public procurement rules, as well as work on the Industrial Accelerator Act (IAA) and the forthcoming Circular Economy Act (CEA). The Presidency will also pursue important files on product rules and market surveillance, climate policy, labour mobility and the next Multiannual Financial Framework (MFF).

FIEC Vice-President Joël Schons, Chair of the FIEC Working Group ‘Housing’, took part in the kick-off meeting of the European Commission’s High-Level Construction Forum Task Force on Offsite Construction on 30 June 2026.The Task Force, coordinated by DG GROW, is linked to the Commission’s wider housing and construction agenda, including the European Affordable Housing Plan and the European Strategy for Housing Construction. This kick-off meeting brought together around 180 representatives from public institutions, research organisations and industry, with the aim of identifying barriers to industrialised construction and practical measures to overcome them.

Discussions focused on the conditions needed to scale up offsite, modular and other industrialised construction methods across Europe. Participants addressed regulatory and practical barriers, including fragmented building rules, lengthy certification and approval processes, and permitting procedures that remain too slow or insufficiently digitalised in many markets.

Beyond regulatory issues, the meeting also pointed to market and capacity constraints: skills shortages, financing and insurance difficulties, logistics, fragmented supply chains and the need for more predictable demand. In this context, public procurement and other demand-side tools were discussed as possible ways to create a stable pipeline for innovative construction methods.

For FIEC, the exchange is aligned with its broader message: Europe’s housing challenge is primarily a question of supply, permitting, investment and construction capacity. Industrialised construction can be part of the answer, provided it is supported by clear framework conditions, a functioning Single Market, appropriate standards and fair competition across the value chain.

The discussion also confirmed the need for careful terminology. The issue should not be reduced to a narrow definition of ‘offsite construction’. A broader approach is needed, covering modular solutions, prefabrication, digital tools, appropriate standardisation, shared metrics and better coordination between design, manufacturing, validation, construction and on-site delivery.

FIEC will continue to follow the Task Force’s work, including future discussions on standards, certification, modular units and building kits. These tools may support scale-up across the Single Market, provided they do not create loopholes or bypass applicable requirements on safety, quality, product performance, liability and fair competition.

Early in June, the European Commission published its proposal for a Council Decision on guidelines for the employment policies of the Member States. The Commission proposes to update the current guidelines notably on job quality, skills and education and poverty reduction and social inclusion.  The main changes focus on:

Within the guideline 6, Member States are encouraged to attract talent and skills from outside the Union via legal migration pathways. In this regard, a recent Eurobarometer survey on Barriers for European SMEs in recruiting workers from outside the EU showed that 54% of SMEs perceived the process of hiring outside the EU as difficult. Only 15% of SMEs are familiar with support services to recruit outside the EU. This survey highlights that more should be done by the Member States to support companies in recruiting outside the Union.

The European Federation of Building and Woodworkers (EFBWW) and FIEC have released a call for tenders for an External Expert to support research activities in their EU-funded CLEARSITE project, which aims to strengthen the fair recruitment and integration of Third-Country National (TCN) workers across the European construction sector.The selected expert will research the different pathways through which TCN workers enter the EU construction labour market, drawing on four case studies from different Member States or companies. The findings will be consolidated into a report identifying best practices and shortcomings in current legal and enforcement frameworks, along with practical guidelines for fair recruitment and integration.

Expertise in EU labour markets, migration and labour mobility policy, industrial relations, and research methods are amongst the requirements for this tender.  Applications must be submitted by the 10^th of September 2026.