“Housing will cushion the withdrawal of the NGEU stimulus and Spain’s Construction Market will grow 4.2% in 2025 and slow down progressively afterwards.”
The Spanish construction sector is accelerating in 2025. It is the result of the upturn in the project portfolio experienced in the final stretch of 2024, driven by falling interest rates, more stable construction costs, and the imminent closing of the window of opportunity for the Next Generation EU funds. The trade turmoil unleashed by the US is not interfering so far, so we expect construction output to grow 4.2% in 2025. In principle, 2026 will be the last year that the building renovation and infrastructure incentives will be in effect, which may fuel a certain last-minute urgency that will contribute to keep the positive inertia (3.5%). Despite all this growth, the Spanish construction sector will still maintain a modest output level compared to the European average. As there are no risks of excessive stock, we see no reason to trim down production in 2027 (2.5%).
New residential building is the key contributor to the progress of construction output during the forecast period. The housing real estate indicators have recovered 2007 levels, driving developers to leave behind the lethargy that has permeated this market in the last decade and a half.
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European construction market forecasts towards 2028
Reinventing the construction industry
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