EU construction declines in January, slightly higher in eurozone

LONDON (ICIS)–EU construction fell by 0.2% in January compared to the previous month, according to official Eurostat data released on Thursday.

This was in contrast with the eurozone, which recorded a 0.2% increase for the same period.

In December, construction increased by 0.4% in the eurozone and 0.7% in the wider EU, according to data from the EU’s official statistics agency.

A drop in civil engineering activity (down 2.8% in the EU, and 1.0% in the eurozone) offset gains in building construction (up 1.2% and 0.9% respectively).

The EU recorded a modest increase at the start of 2025, up 0.2% compared to the previous year, with production stable in the eurozone.

In contrast with the monthly figures, increased building works (EU up 1.5%, eurozone up 1.8%) was supported by a rise in civil engineering output (up 0.9% for both blocs).

Construction is a key end-use market for the chemicals industry, and so weak activity reflects the bearish sentiment witnessed at the beginning of the year.

Winter has in the past been a slower period for construction work, with increased output typically expected in periods of warmer weather.

In the wake of the COVID pandemic, however, traditional seasonal patterns have been thrown off and European recessions have weighed on sectors like construction, which rely on substantial long-term investments.

“The construction sector is under heavy financial pressure, with a growing number of distressed balance sheets. The outlook is less upbeat year on year because of concerns over tariffs,” said ICIS demand analyst Jincy Varghese.

“On the positive side, markets are expecting interest rate cuts. The European Central Bank (ECB), as expected, lowered three key interest rates by 25 basis points on 5 February, but the governing council said it was not pre-committing to a particular rate path.”

Please also visit the ICIS construction topic page Macroeconomics: Impact on Chemicals.