EU construction output is expected to grow 1.5% on-year in 2026 and accelerate to 2.9% in 2027, following 1.3% growth in 2025, according to the European Steel Association (Eurofer) outlook.
Construction, which accounts for 37% of EU apparent steel consumption, continues to provide the strongest support for steel demand. The sector contracted 1.6% in 2024, despite support from NextGenerationEU-related schemes and monetary easing, before returning to modest growth in 2025.
Output growth slowed to 0.4% year-on-year in the first quarter of 2026 from 3.1% in Q4 2025, most probably reflecting the usual seasonal slowdown in construction activity during the first quarter, Eurofer says.
Growth should accelerate later in 2026 despite higher interest rates, before picking up more speed in 2027, thanks to a recovery in housing demand and a pick-up in infrastructure spending, the association adds.
Overall, EU steel-using sector output, measured by the Steel Weighted Industrial Production (SWIP) index, is forecast to grow 1.5% in 2026, following a marginal 0.1% decline in 2025 and a 4.1% contraction in 2024. Growth is expected to accelerate to 2.5% in 2027, supported by construction, mechanical engineering and a recovery in automotive output, Kallanish notes.EU steel weighted industrial production (SWIP) index, y-o-y %Sector202120222023202420252026f2027fConstruction6.23.31.9-3.31.21.82.9Mechanical engineering124.71.6-5-0.71.91.8Automotive6.15.48.8-9.6-4.1-0.93.5Domestic appliances12.6-4.6-4.5-4.90.80.30.8Other transport3.87.310.35.72.472.3Tubes10.3-1.3-1.4-2.40.11.31.2Metalware121.2-3.9-3.3-0.32.12.1Others12.13.92.8-1.62.51.61.6SWIP8.22.82.3-4.1-0.11.52.5
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