Sizeable backlog supporting European building construction activity

A substantial backlog of work is supporting building construction activity in the face of falling permits. Building companies in the EU report a 11.5-month backlog of work, up from an average of 9.5 months in the decade before the coronavirus pandemic.

What you will learn:

• Labour shortages across much of Europe and supply chain disruptions in some markets are hampering the construction industry’s ability to work through this backlog. Over 28% of building companies report labour shortages are limiting construction activity and 6% report shortages of materials and/or equipment are limiting activity.
• We expect the European Central Bank will start cutting rates this month, which will support a rebound in demand for building construction work in 2025. A key uncertainty in the forecast is the extent to which the backlog of work will sustain building construction activity long-enough for the rebound in demand from falling interest rates to translate into actual construction activity.