Eastern Europe’s construction industry is forecasted to grow by 3.6% in 2021, following a 1.6% contraction in 2020 due to the COVID-19 outbreak and subsequent lockdown restrictions, according to GlobalData, a leading data and analytics company.

According to GlobalData’s report, ‘Global Construction Outlook to 2025, Q1 Update’, with the vaccination rollout programme starting across much of the region, there is an expectation that lockdown measures are likely to be lifted, allowing for a strong economic recovery in the second half of the year.

The impact of COVID-19 created a varied picture across the region. In Romania and Estonia, construction output grew by 10.2% and 6.8% in 2020, while Hungary and Azerbaijan output contracted sharply by 9.4% and 15.2%, respectively.

While many markets in the region managed to avoid a severe outbreak during the first wave of infections across Europe, the region has seen a large spike in cases in recent months.

Moustafa Ali, Economist at GlobalData, comments: “Governments across the region have imposed strict lockdown measures to contain the third wave of infections, which is likely to impact construction markets in Eastern Europe and the spill-over effects from the expected weakening in economic activity across the region, even if the construction industry is exempted from the local lockdowns.

“A significant upside for the industry this year is fiscal support from the EU through the recovery funds, which is expected to support growth in the EU’s Eastern bloc. Additionally, the Turkish Government has pledged significant spending on transport and residential infrastructure projects, which is expected to support the industry and increase growth by 3.8% in 2021. Meanwhile, the Russian construction industry will be supported by the recovery in oil prices, which will bolster government finances to help support investments in transport infrastructure projects. Russia’s construction industry is expected to expand by 2.6% in 2021.”