Country report

The German economy stagnated in 2024, weighed down by external crises such as the Ukraine conflict, technological change and competition from China. At the same time, high energy costs and tight regulations are having a negative impact. From 2025 onwards, falling interest rates and gains in purchasing power should help to bring some momentum back to the economy. Euroconstruct is forecasting growth of +0.5% for 2025, with an increase of 1.5% expected for 2026 and 1.0% for 2027.

The German construction industry recorded a decline in construction output of 2.8% in 2024, with residential construction particularly affected. Construction investments remained below expectations due to the more than 40% increase in construction prices over the last four years. To some extent, this also affected civil engineering, where projects were slowed down by tight public finances despite the high demand for infrastructure works. At the same time, however, opportunities arose in relation to the energy transition. The call for new elections in Germany following the collapse of the coalition government could further delay investment decisions. Euroconstruct is forecasting a further 4% decline in construction volume for 2024–2026, with stabilisation expected starting in 2027.

In residential construction, the construction volume fell by 4.6% in 2024. Despite the ongoing high demand for housing, both private clients as well as residential construction companies were discouraged from pursing new construction projects by high interest rates, limited public funding and increased construction costs. The decline in residential construction was cushioned somewhat by a more stable market for renovation work, which shrank by only 1% thanks to thermal modernisation works and other energy-efficient investments. Euroconstruct predicts that the -4.6% in 2024 will mark the low point in the residential construction sector. A more moderate downward trend is expected for 2025 and 2026, with declines of 1.9% and 1.0%, respectively.

Other building construction, which shrank by 1.7% in 2024, was affected by economic uncertainty and the reluctance among some companies and the public sector, particularly at the municipal level, to make investments. Euroconstruct expects the sector to contract minimally by 0.1% in 2025, with the trend turning positive again (+0.7%) in 2026.

The civil engineering sector recorded growth of 1.0% in 2024. Long-term state investment programmes in rail, water and road infrastructure continue to have a positive impact. Investments in energy transition projects also indicate further market growth in the energy sector in the medium and long term. By contrast, municipal authorities remained hesitant to invest in road and water engineering projects. Slight growth of 0.2% and 0.3% p.a. is expected in 2025 and 2026, respectively.

The STRABAG Group is the leading construction company in Germany, with a market share of 2.0% of the total construction market. With € 9,361.43 million, around 49% of STRABAG’s total Group output volume was generated in Germany in 2024 (2023: 47%). Most of the output is allocated to the North + West segment, while the building soltutions business (previously property and facility services) provided in Germany are allocated to International + Special Divisions.

The mild recession of 2023 continued into 2024, with the country’s GDP falling by 0.6%. Declining inflation, rising real wages and lower European Central Bank (ECB) interest rates, combined with government stimulus packages, can be expected to have a positive effect on GDP in subsequent years, albeit with a slight delay. On the other hand, Austria faces economic uncertainty, lower corporate investments, a rising unemployment rate and a growing national budget deficit. Nevertheless, Euroconstruct is forecasting that growth will reach 1.0% in 2025 before increasing to 1.5% in 2026 and remaining stable at this level in 2027.

The Austrian construction industry recorded a decline of 4.4% in 2024, particularly in building construction. The dampening effects that were already noticeable in 2023 – persistently high interest rates, strict lending guidelines and increased construction costs – continued into 2024. A trend reversal began to emerge, however. Euroconstruct expects slight growth of 0.4% in 2025 with increases of 1.6% and 0.9% in 2026 and 2027, respectively.

As expected, residential construction saw the sharpest decline, falling by 6.3% in 2024. This was due to a combination of higher inflation and mortgage rates, as well as strict lending guidelines, resulting in a sharper decline in Austria compared to the European average. However, the corresponding regulation will expire in mid-2025. The market for renovations, which grew by 3.8% thanks to high demand for energy efficiency and thermal modernisation projects, had a stabilising effect. Overall, the decline will slow to 0.5% in 2025 before the trend turns positive again in 2026 with growth of 1.5%.

The volume of other building construction work in 2024 was negatively impacted by the combination of a weak economy, higher construction costs and persistently high interest rates, falling by 4.1% as a result. In the commercial sector in particular, numerous investments in new builds and renovation projects were postponed for the time being, although a recovery in this segment is foreseeable. According to Euroconstruct, the other building construction segment will see growth of 0.8% in 2025 and a moderate increase of 2.6% in 2026.

Civil engineering recorded growth of 1.7% in 2024 due to continued strong government investments in infrastructure programmes. The expansion of the road and, in particular, the rail network was firmly anchored in the Austrian budget. Investments in the energy sector for the expansion of renewable energy sources and in the telecommunications sector for a nationwide broadband network are gaining in importance. Significant growth of 2.6% is expected for 2025. Based on current investment planning, however, the civil engineering segment is expected to decline by 0.3% in 2026.

The STRABAG Group generated 15% of the total Group output volume in its home market of Austria in 2024 (2023: 16%). Austria thus continues to be one of the Group’s top three markets along with Germany and Poland. The output reached a volume of € 2,855.94 million in 2023. This gives STRABAG a 5.7% share of the construction volume in the overall market in Austria.

After stagnating in 2023, Poland’s economy grew strongly in 2024, with GDP rising by 2.7%. The main drivers of this growth were a recovery of domestic demand, higher private consumption, lower inflation and rising real wages. Delays in EU funding and in the National Recovery Plan prevented higher investments. These could provide more momentum from 2025 onwards. Euroconstruct expects GDP growth of 3.4% in 2025, to be followed by +2.8% and +3.1% in 2026 and 2027, respectively.

The Polish construction industry shrank by 2.5% in 2024 due to high construction and energy costs, a shortage of skilled workers and the policy realignment by the new government. This was exacerbated by the transition between EU funding periods and the more cautious municipal investment spending in an election year. Positive momentum, however, was provided by rising real wages, stable prices and more relaxed lending policies. From 2025 onwards, new EU funding from the National Recovery Plan and the high level of investments needed at the national level should invigorate the construction industry, with growth rates forecast at +4.9% in 2025, +6.1% in 2026 and +4.0% in 2027.

Bucking the European trend, Poland’s residential construction sector saw significant growth of +4.6% in 2024. High returns on residential construction projects and solid demand encouraged property developers to launch new projects, which led to an increase in building permits. This development was supported by more stable prices, relaxed lending guidelines, falling interest rates, lower inflation and government subsidy programmes for residential construction financing. The renovation sector also benefited from the high modernisation demand for existing buildings in accordance with EU requirements. This positive trend is expected to continue, with projected growth of 3.8% in 2025 and 5.3% in 2026.

Other building construction recorded a decline of 5.9% in 2024, largely due to a lack of public investments and delayed EU funding. Rising costs for wages, fuel and electricity also fuelled uncertainty among investors. Starting in 2025, government investments under the National Recovery Plan, particularly in public buildings, military facilities and energy efficiency and thermal modernisation projects for existing buildings, are expected to provide new momentum. Euroconstruct predicts growth in the other building construction segment to reach 2.7% in 2025 and 4.5% in 2026.

Following an exceptionally strong performance in 2023, Poland’s civil engineering segment recorded a decline of 4.7% in 2024. The previously high demand, driven by the accelerated implementation of national and local programmes in the road, energy and water infrastructure sectors, fell significantly as a result of a slowdown in public investment. With the release of EU funding for the National Recovery Plan and for urgently needed repairs following flooding in the country’s southwest, Euroconstruct expects strong growth of 8.2% in 2025 and a further increase of 8.4% in 2026.

As the number two in the construction sector in Poland, STRABAG realised a construction volume of € 1,696.65 million here in 2024, representing 9% of the Group’s total output volume (2023: 7%). Poland thus represents the third-largest market of the STRABAG Group. Its market share in the entire Polish construction market was 2.4%.

The Czech economy achieved moderate GDP growth of 1.1% in 2024. High government spending and extensive investments by the Czech government and the EU contributed significantly to the positive development. Additional momentum came from a decline in inflation, falling interest rates and a comparatively low unemployment rate. In 2025 stable GDP growth of 2.7% is expected, followed by 2.5% in 2026 and 2.7% in 2027.

The Czech construction industry recorded a moderate decline of 1.0% in 2024. The sector was burdened by a persistent shortage of skilled workers and rising prices for construction materials and energy but benefited from funding under various EU programmes, which generated a significant amount of momentum. Euroconstruct forecasts growth of 1.3% for 2025. Further acceleration is expected in subsequent years, with growth of 2.7% in 2026 and 3.6% in 2027.

Residential construction recorded a decline of 1.4% in 2024, particularly in the new builds sector, due to continued high lending rates and the inflation of previous years. At the same time, the rising demand for rental housing is likely to lead to increased investment by property developers and the government in the future. The renovation market proved robust, growing by 2.7% in 2024. Euroconstruct is forecasting a recovery in residential construction from 2025 onwards, with growth of 3.1% in 2025 and 4.1% in 2026.

Other building construction in the Czech Republic showed moderate growth of 0.8% in 2024. Investments were concentrated primarily on healthcare and educational facilities, while the construction of industrial and logistics buildings declined in importance. The boom in e-commerce triggered by the Covid-19 pandemic, which had strongly driven the construction of logistics buildings, is now showing a downward trend. The other building construction segment is expected to grow by 1.6% in 2025, with an increase to 3.0% in 2026.

The Czech civil engineering segment recorded a decline of 1.6% in 2024, with the renovation market (-4.8%) weakening in particular. By contrast, new projects are emerging as a growth area, supported by funding from the government, local authorities and EU programmes. The focus is on large projects such as the expansion of transport infrastructure, high-speed rail lines and planned nuclear power plants. A further decline of 2.0% is expected for 2025, followed by stagnation in the segment at 0.0% in 2026.

STRABAG is the number three on the market in the Czech Republic. With an output volume of € 1,016.84 million in 2024, around 5% of the Group’s total output (2023: 5%) was generated in the country. The market share in the entire construction market is 2.6%.

The Hungarian economy recorded GDP growth of 1.4% in 2024. Real wage increases, stable employment figures and a normalisation of inflation helped to overcome the stagnation of the previous year. At the same time, however, higher interest rates and reduced investment spending as a result of tighter budget discipline continued to have the opposite effect. The GDP is forecast to grow by 3.2% in 2025, followed by 4.0% in 2026 and 3.0% in 2027.

The Hungarian construction industry recorded a decline of 4.3% in 2024. The government’s investment freeze is being lifted only gradually, and the positive effects of released EU funds and other financing will not be felt until the coming years. Euroconstruct therefore expects the Hungarian construction industry to grow by 2.8% in 2025, followed by 4.3% in 2026 and 4.6% in 2027.

Following the significant contraction of 14.2% in 2023, residential construction shrank by a further 4.0% in 2024. In particular, the new builds sector continued to be weighed down by the government’s investment freeze as well as by high construction costs, increased interest rates and low selling prices. A recovery is expected from 2025 onwards, however, supported by government measures such as financing from pension funds, renovation grants for rural houses, interest rate caps, lower down payments and a reduced VAT rate for certain regions and for the purchase of new homes. This is expected to lead to strong growth of 9.9% in 2025 and a further 6.2% in 2026.

Other building construction in Hungary fell by 5.3% in the reporting year. The segment suffered from the hesitant relaxation of the government’s investment freeze and the completion of many large projects, including in the field of electric mobility and public administration buildings. Positive momentum could come from the partial release of EU funds and growing government activity in the run-up to the 2026 parliamentary elections. Euroconstruct is forecasting a further decline of 2.1% in 2025, before the sector returns to growth in 2026 with an increase of 1.5%.

The Hungarian civil engineering segment recorded a decline of 3.2% in 2024, with the weak renovation sector in particular, which shrank by 9.2%, weighing heavily on the overall result. Positive impulses could come from loans of € 1 billion each from the European Investment Bank (EIB) and from China, which will partially compensate for the lack of EU funds for the time being. Large road construction projects are due to start thanks to an exemption from the investment freeze. The construction of a large nuclear power plant and an extensive maintenance programme for the rail network are also likely to get underway. According to Euroconstruct, this will lead to noticeable growth of 4.1% in 2025 and 6.3% in 2026.

The STRABAG Group generated € 619.52 million, or 3% of its output, in Hungary in 2024 (2023: 4%). This puts STRABAG in third place in the Hungarian construction market. Its share of the total market reached 2.8%.

The Romanian economy grew by 2.8% in 2024 but remained slightly below expectations. Consumer prices fell more slowly than assumed, and interest rates persisted at a high level. Nevertheless, high employment figures and faster increases in real wages gave rise to confidence that both consumption and investment will pick up in the coming years. For 2025 and 2026, EECFA expects a noticeable increase in GDP of 3.5% and 3.7%, respectively.

In contrast to the development of the overall economy, the output of the Romanian construction industry fell by 3.9% in the year under report. Persistently high construction costs and interest rates affected all segments. Another factor was the significant increase in minimum wage, which pushed up construction costs further. EECFA expects interest rates to fall in 2025, which should lead to higher investments. Construction output in Romania will fall by another 1.0% in 2025 before recovering slightly by +1.1% in 2026.

Residential construction, as expected, recorded the largest decline with a minus of 11.6%, due mainly to the new builds sector. High construction costs and persistently high interest rates had a negative impact on growth. At the same time, developers and buyers are increasingly hoping for a recovery in the property market, based on expectations of falling interest rates, better financing conditions and rising real wages. EECFA believes the low point was reached in 2024 and expects a slight decline of 0.7% in 2025 before the market turns positive again in 2026 with a growth rate of 0.7%.

Other building construction in Romania recorded a decline of 3.9% in 2024. The renovation market, which grew by 8.9%, had a stabilising effect here. The main reason for the decline was the weak new office construction market, which was unable to recover from the effects of the Covid-19 pandemic and the increased shift towards remote working. In the coming years, EU co-financing is expected to boost investments in educational and healthcare facilities. In addition, growth in the commercial building sector is forecast as rising real wages should boost consumption and retailers push ahead with their expansion plans. For 2025 and 2026, EECFA forecasts moderate growth of 1.2% and 1.3%, respectively.

With growth of 4.9%, civil engineering proved to be the strongest segment of the Romanian construction industry in 2024, to which the renovation market contributed in particular with an increase of 15.5%. Support came in the form of investments in road and rail construction, funds from the National Recovery and Resilience Plan (NRRP), and EU funding. The switch to the new EU programme, which requires higher own resources, and possible cuts to the NRRP budget could have a negative impact in the future. EECFA is forecasting a short-term decline of -2.7% in 2025, due to the election of a new government, but expects a recovery of 1.4% in 2026.

With an output of € 467.13 million in 2024, the STRABAG Group holds a 1.3% share in the entire Romanian construction market, securing 4^th place in the market.

The Slovak economy grew by 2.3% in 2024. Rising real wages and falling inflation bolstered private consumption, which offset the decline in EU funding. The labour shortage had a slightly dampening effect, but the hurdles for work permits for third-country nationals were gradually lowered. Investments from the Recovery and Resilience Plan (RRP) and increased military imports should keep the GDP firmly in positive territory in the years to come. Euroconstruct expects growth of 2.2% in 2025, 2.4% in 2026 and 1.0% in 2027.

Slovakia’s construction industry recorded a significant decline of 6.5% across all segments in 2024, as the change of government in 2023 led to delays in various construction projects. The resulting austerity measures also had an adverse effect, as did the aftereffects of increased costs for materials, energy and construction services. In the coming years, investments from the RRP, EU funds and increased private and foreign investments could revive the construction industry. Euroconstruct expects growth of 2.7% in 2025 and 2.8% in 2026, followed by stagnant growth of +0.1% in 2027.

Residential construction recorded a decline of 6.8% in 2024, mainly attributable to the new builds sector. While the segment is suffering from persistently high construction costs and lending rates, positive impulses are expected from increased real wages and investments in energy-efficient residential buildings. According to Euroconstruct, residential construction should grow by 1.7% in 2025, with stronger growth of 5.6% forecast for 2026.

With a decline of 1.2%, other building construction was down slightly in 2024. The new government’s austerity policy led to lower investments, while continued high costs slowed growth. Impulses are expected primarily from funding for projects in the health and education sectors, while the automotive industry is still considered the most important private investor. Euroconstruct forecasts growth of 3.0% in 2025 and a further increase of 2.2% in 2026.

Following the unusually strong growth of 11.2% in 2023, the civil engineering segment fell sharply by 13.4% in 2024. This was due to increased material costs, long procurement procedures and delays in the completion of large projects. Investments in key infrastructure projects, such as road and rail lines, were postponed due to limited state and EU funds. With the growing demand for modern infrastructure, particularly in the electrification and modernisation of railway lines and the expansion of road and energy networks, a recovery is expected in 2025. Euroconstruct forecasts growth of 4.0% in 2025 and a decline of 1.3% in 2026.

With a market share of 3.0% and an output volume of € 305.43 million in 2024, STRABAG is the leader in Slovakia. In 2024, Slovakia contributed 2% to the Group’s total output volume (2023: 2%).

The Croatian economy grew by 3.6% in 2024, continuing to reap the benefits of joining the Schengen Area and the Eurozone the previous year. The tourism sector again delivered strong results. Real wages increased significantly, and both the unemployment rate and inflation gradually declined. In view of these positive developments, EECFA forecasts stable GDP growth of 3.3% in 2025 and 2.9% in 2026.

The country’s construction industry achieved growth of 4.3% in 2024, supported primarily by a strong residential construction market and continued high investments in major civil engineering projects. The first signs of a decline in the building construction segment in the short to medium term are emerging, but these are likely to be offset by a strong civil engineering market. For 2024 and 2025, EECFA is forecasting a slight increase in construction output of 0.8% and 0.4%, respectively.

The Croatian residential construction segment grew by 7.5% in 2024, mainly due to sustained high demand. However, noticeable price increases and new government measures aimed at utilising vacant apartments could lead to a weakening of demand in the years to come. Positive stimuli are provided by falling home loan costs, rising real wages and the continued high demand from foreign buyers. In addition, the National Housing Plan is designed to promote affordable and sustainable housing and to facilitate energy-efficient renovations. For 2025 and 2026, EECFA expects declines of 0.6% and 2.7%, respectively.

Following an exceptionally strong performance in 2023, the other building construction segment recorded only a slight increase of 0.4% in 2024. The markets for offices and for educational and healthcare buildings, which were supported by EU funding, developed positively. By contrast, the market for industrial and logistics buildings declined as the order backlog was largely worked off. The retail and wholesale trade and the hotel market also developed rather cautiously in view of the inflation. In the long term, however, strong tourism and Croatia’s growing importance as a place of industry could ensure a recovery in these segments. EECFA expects declines of 2.0% and 2.3% for 2025 and 2026, respectively.

The Croatian civil engineering segment grew by 3.8% in the reporting year, thanks in particular to investments in communication and electricity networks and the major TEN-T project, which involves the extension of two core network corridors into Croatia. Rail and road construction grew more slowly than expected but should catch up in the next few years. The speed at which the existing order backlog involving complex large construction sites is being worked off will slow things down in the short term, but further large projects are planned from 2026 onwards. Additional momentum is likely to come from investments in the power grid and the expansion of renewable energies. The EECFA forecasts are correspondingly optimistic: growth of 5.3% in 2025 and of 6.7% in 2026.

With an output of € 222.72 million in 2024, the STRABAG Group holds a 2.7% share in the entire Croatian construction market, securing 2^nd place.