High-rise Construction Stimulates Growth in European Construction Sector

Activities in the European construction sector surged in July, following a weak June, supported by a recovery in the high-rise segment, according to data from the European statistical office. Seasonally adjusted production in the construction sector of the 28-member European Union jumped by 1.1 percent in July compared to the previous month when, according to revised Eurostat estimates, it stagnated.

The recovery was led by the high-rise sector, where activities increased by 1.3 percent after a slight decrease of 0.3 percent in the previous month. The low-rise sector, on the other hand, recorded an acceleration, with activity growth of 0.9 percent, following a 0.1 percent decline in the previous month.

The Eurozone recorded an even stronger surge in construction sector production in July, increasing by 1.8 percent compared to the previous month when activities, according to revised data, rose by a meager 0.3 percent. In the high-rise segment, production jumped by 2.2 percent compared to the previous month when it stagnated. In the low-rise segment, growth sharply slowed from 1.2 percent in June to 0.4 percent.

Among EU countries for which Eurostat had data, the largest monthly production jump in July was recorded in the construction sector of France, at 4.8 percent. This was followed by Slovenia with 2.0 percent, Spain with 1.9 percent, and Germany with 1.8 percent. The largest decrease in production was noted in the Slovak construction sector, at 11 percent. Hungary followed with a monthly production decline of 3.2 percent.

Croatia is not required to submit monthly data. In the second quarter, seasonally and calendar-adjusted production growth in the construction sector slowed compared to the previous quarter, to 0.9 percent, down from 3.4 percent growth in the first three months of this year, according to Eurostat data. Year-on-year, calendar-adjusted production in the Croatian construction sector increased by 4.6 percent from April to June, following a 3.4 percent growth in the previous quarter.

High-rise Construction Leads Growth in the EU Year-on-Year

Year-on-year, production in the EU28 construction sector increased by 1.0 percent in the second quarter, double the strength of the first quarter of this year, as revised Eurostat data for the period from January to March shows. A double stronger growth rate was recorded in the high-rise sector, at 1.8 percent. In the low-rise sector, production decreased by 2.7 percent, following a 2.2 percent decline in the previous three months, according to calendar-adjusted Eurostat data.

In the Eurozone construction sector, production rose by 3.1 percent in the second quarter, more than five times stronger than in the first quarter of this year, as revised Eurostat data shows. Production in the high-rise segment surged by 3.2 percent, after nearly stagnating year-on-year in the previous quarter. In the low-rise segment, it increased by 2.9 percent, following a 2.1 percent growth in the previous quarter.

Among EU countries for which the European statistical office had data, the highest production increase in the construction sector was recorded in Spain, at 12 percent, and Sweden, at 10.0 percent. The largest decreases were noted in Slovakia, at 23.3 percent, Hungary, at 17.6 percent, and Poland, at 15.1 percent.