Western Europe Construction Market Size, Trend Analysis by Sector, Competitive Landscape and Forecast to 2027
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Explore actionable market insights from the following data in the ‘Western Europe Construction Market’ report:
- Western Europe construction market outlook: analysis as well as historical figures and forecasts of opportunities from the sector and regional segments.
- Key Insights on Leading Sectors: Commercial Construction, Energy and Utilities Construction, Industrial Construction, Infrastructure Construction, Institutional Construction, and Residential Construction.
- Overview of the Western Europe construction industry outlook to 2027.
- Analysis of the construction output values (Real) in major countries: Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, The Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, and the UK.
- Dedicated section covering key industry participants by country including top consultants and contractors.
How is the ‘Western Europe Construction Market’ report different from other reports in the market?
Businesses need to have a deeper understanding of the market dynamics to gain a competitive edge in the coming decade. Get the ‘ Western Europe Construction Market’ report today, which will help you to:
- Evaluate regional trends in construction development from insight into output values and project pipelines.
- Identify the fastest growers to enable assessment and targeting of commercial opportunities in the markets best suited to strategic focus.
- Identify the drivers in the Western Europe construction market and consider growth in developed economies.
- Formulate plans on where and how to engage with the market while minimizing any negative impact on revenues.
We recommend this valuable source of information to anyone involved in:
- Contractors Including Civil Works, Electrical, HVAC, and Others
- Consultants/Designers
- Building Material Merchants/Players
- Management Consultants and Investment Banks
- Portfolio Managers/Buy-Side Firms
- Strategy and Business Development
- Investment Banking
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Western Europe Construction Market Overview
The Western Europe construction market size is projected to reach $2,093.4 billion in 2023 and is estimated to register a compound annual growth rate (CAGR) of 1.4% over the forecast period. The growth is primarily supported by investments in the energy and utilities sector, in line with the different government’s target of generating electricity through renewable energy sources by 2030.
The forecast-period growth in the energy and utilities sector will also be supported by the setting up of solar plants in various phases to reduce dependence on fossil fuels. For example, in April 2023, Vinci Airports, a subsidiary of the construction engineering company, Vinci Group announced its plan to construct a solar power plant within the Lyon-Saint Exupéry Airport (LYS) to generate electricity around Lyon.
Western Europe Construction Market Outlook, 2018-2027 ($ Billion)
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GlobalData expects the Western Europe construction industry to shrink in 2023, declining by 3.4% in real terms, owing to the impact of elevated costs for materials, energy and labor, and the continued tightening of monetary policy, which are all expected to weigh on both economic and industry growth in the coming quarters. The downturn is expected to continue in 2024 as well with an estimated degrowth of 0.3% in real terms. The scenario is estimated to improve from 2025 with output levels gaining strength from the development of energy infrastructure, particularly renewable energy, as well as investment in water infrastructure.
Market Size (2023) | $2,093.4 billion |
Market Size (2027) | $2,246.0 billion |
CAGR (2022-2027) | 1.4% |
Historic Period | 2018-2022 |
Forecast Period | 2023-2027 |
Report Scope & Coverage | Sector Overview, Construction Output Value ($ Million) by Country and Sector, Regional Outlook by Key Countries, Key Industry Participants |
Key Sectors | Commercial Construction, Energy and Utilities Construction, Industrial Construction, Infrastructure Construction, Institutional Construction, and Residential Construction |
Key Countries | Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, The Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, and the UK |
Western Europe Construction Market Segmentation by Sectors
The Western Europe construction industry covers commercial construction, energy and utilities construction, industrial construction, infrastructure construction, institutional construction, and residential construction. Among these, residential construction captured the largest regional share in terms of construction output value (Real) in 2023.
Residential Construction: This segment is poised to account for the largest regional share in terms of construction output value (Real) in 2023. The regional residential sector is expected to shrink sharply in 2023 and 2024, as incentive schemes that drove the surge in activity in 2021 and 2022 come to an end. The headwinds caused by rising interest rates and the higher costs for residential building construction will directly impact the segmental dynamics over the short-term period.
Western Europe Construction Market Share by Sectors, 2023 (%)
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Institutional Construction: This sector is predicted to grow marginally by 0.3% in real terms in 2023 owing to the general negative impact on new investment stemming from the weaker economy and high construction costs. The sector is expected to pick up gradually from 2024, supported by investments in educational, healthcare, museum, and research-building projects.
Over the forecast period, this segment at a regional level is expected to showcase an annual average growth rate (AAGR) of 1.9% from 2024 to 2027. The key driver for segmental growth is increasing investments in healthcare and medical buildings in the region. For instance, In May 2023, the UK government announced its commitment to rebuild five major hospitals in several regions by 2030, as part of the New Hospital Programme.
Infrastructure Construction: This category is estimated to capture second largest regional share in terms of construction output value (Real) in 2023. The deceleration in growth in 2023 is attributed to rising material costs; this is likely to delay progress in certain non-essential infrastructure projects in the coming months. Nonetheless, this segment is likely to progress at a steady rate over the forecast period.
The rail construction projects are expected to amplify activities in the regional infrastructure construction market. For instance, the Danish Road Directorate along with Banedanmark, a railway company owned by the Danish Government, are undertaking the construction of a 35km, double-track and electrified railway line between Odense and Middelfart on the island of Funen.
Industrial Construction: The industrial construction segment is likely to account for the smallest regional share in terms of construction output value (Real) in 2023. The forecast period growth in the sector will be determined by the investment momentum.
For example, in March 2022, BASF SE, the German multinational chemical company announced plans to construct an Alkyl Ethanolamines production plant in Antwerp. The EUR452.2 million ($461.9 million) project involves the construction of an alkyl ethanolamines production plant with a capacity of 140,000 tons per annum (TPA), comprising of production units, storage facilities, and other related facilities by the end of 2024.
Energy and Utilities Construction: The regional activities in the energy and utilities construction sector are likely to flourish over the forecast period owing to the rising effort to transit toward clean energy sources. This sector is predicted to depict the fastest-compound annual growth rate (CAGR) over the forecast period.
The after-effects of the Russia-Ukraine conflict directly impacted the regional energy market with an incremental rise in the prices of electricity. Many regional governments are working on strategies to develop sustainable sources of electricity generation. For instance, the French government aims to have more than 100GW of solar photovoltaic (PV) parks and 40GW of offshore wind power generation capacity by 2050.
Commercial Construction: This category is estimated to account for the third-largest regional share in terms of construction output (Real) in 2023. This segment is estimated to shrink by 0.9% in real terms in 2023 owing to the weak investor and consumer confidence, amid rising inflation and continued weakness in the regional tourism sector. However, the recovery is expected from next year with an anticipated average annual growth rate (AAGR) of 2.6% from 2024 to 2027.
Western Europe Construction Market Analysis by Region
Western Europe Construction Market Analysis by Region
Western Europe construction sector is primarily dominated by six countries namely the UK, Germany, France, Italy, Spain, and the Netherlands in terms of construction output value (Real). These six countries together are expected to account for more than 75.0% of the regional share in 2023.
Western Europe Construction Market Share by Country, 2023 (%)
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The UK construction industry is expected to account for the largest share of more than 19.0% in terms of construction output value (Real) in 2023. The current trend showcases a shrinkage in 2023, declining by 1.2% in real terms, owing to the impact of elevated costs for materials, energy and labor, and the continued tightening of monetary policy, which are all expected to weigh on both economic and construction industry growth in the coming quarters.
Germany’s construction industry is likely to register second place in terms of construction output value (Real) in 2023. The domestic sector is expected to remain sluggish in 2024, edging up by just 0.4%, given the ongoing weakness in the residential sector, but it will gain momentum from 2025, assuming a recovery in the economy and a pickup in investment in transport, renewable energy, housing, and manufacturing projects.
The third sport in the regional dynamics in terms of construction output (Real) in 2023 is projected to be captured by France. The country registered a marginal annual growth of 0.4% in real terms in 2022, with high material costs and fuel prices contributing to a more challenging operating environment for contractors. However, over the forecast period, the domestic industry’s output will also be supported by investments in manufacturing plants and specialized infrastructure to support the government’s aim of launching new buses and coaches in 2025 that must be low-emission vehicles and will be acquired for public transport services.
The construction industry of Italy in terms of construction output value (Real) is estimated to register fourth place in 2023. The industry’s growth over the forecast period will also be supported by investment in the renewable energy sector. In mid-March 2023, Terna announced that it will invest EUR21 billion ($21.4 billion) over the next ten years to accelerate energy transition and reduce the country’s dependence on foreign supplies.
Western Europe Construction Market Segments and Scope
Western Europe Construction Market Sectors Outlook (Value, $ Million, 2018-2027)
- Commercial Construction
- Energy and Utilities Construction
- Industrial Construction
- Infrastructure Construction
- Institutional Construction
- Residential Construction
Western Europe Construction Market Countries Outlook (Value, $ Million, 2018-2027)
- Austria
- Belgium
- Denmark
- Finland
- France
- Germany
- Greece
- Ireland
- Italy
- Netherlands
- Norway
- Portugal
- Spain
- Sweden
- Switzerland
- UK
Key Highlights
The Western European construction market size will be evaluated at $2,093.4 billion in 2023. The construction market in Western European region is expected to grow at a CAGR of 0.7% during 2022-2027.
Key Players
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Frequently asked questions
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What was the Western Europe construction market size in 2023?
The Western Europe construction market size will be evaluated at $2,093.4 billion in 2023.
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What is the Western Europe construction market growth rate?
The construction market in the Western Europe region is expected to grow at a CAGR of 1.4% during 2023-2027.
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Which is the leading sector in the Western Europe construction market?
The residential construction segment is poised to account for the largest regional share in terms of construction output value (Real) in 2023.
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Which is the leading country in the Western Europe construction market?
The UK is expected to account for the largest share of more than 19.0% in terms of construction output value (Real) in the Western Europe construction market in 2023.
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Is there a third level of segmentation in the report?
GlobalData’s focus is on providing reliable and accurate data that is supported by robust research methodology. Our reports undergo rigorous quality checks and are based on primary and secondary research sources, ensuring that the numbers and insights provided are trustworthy. However, despite the best efforts to gather comprehensive data, there could be instances where the available data is limited, making it challenging to provide third-level segmentation. In such cases, GlobalData may choose to provide high-level insights and general trends rather than forcing segmentation that may not be backed by sufficient data. This approach ensures that the report’s overall quality and credibility are maintained.
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