Construction Market Insights - Europe

Linesight’s Construction Market Insights report for Europe offers an overview of the construction industry’s performance in 2023 and projections for 2024.

This report provides coverage of the construction industry across Europe, including Belgium, Denmark, Finland, France, Germany, Ireland, Israel, Italy, the Netherlands, Sweden, and the United Kingdom. It comprises macroeconomic, commodity movements, key considerations in various sectors such as data centers, life sciences, and high-tech industrial, and pinpointing growth opportunities amid skilled worker shortages. 

Key economic and industry findings include:

• Economic growth: Europe's economic recovery is gaining momentum as inflation rates begin to decrease and interest rates level. This positive trend indicates a brighter outlook for the construction industry and the broader economy.
• Construction industry: While residential and commercial sectors are experiencing increased challenges, in contrast the ‘mission critical’ and high tech sectors are in high-demand. This is helping to keep construction output up, which will likely continue into 2024, fueled by solid investments in these key sectors. Public investments in infrastructure and utilities are also showing promise across the region.
• Labour shortage: The increasing demand in data centers, life sciences and high-tech sectors is exacerbating the acute shortage of specialist skilled construction workers, posing a significant challenge to the industry's capacity for growth and innovation.
• Sustainability: The industry's commitment to sustainability is intensifying, with a focus on adopting renewable energy sources and innovative cooling technologies to meet stringent environmental regulations.
• Commodities market adjustment: The construction sector has recently experienced a welcome phase of market correction in commodities, leading to a decrease in material costs, even for energy-intensive materials.

Sector-specific insights

• Data Centres: Expansion is being driven by increased cloud computing and AI adoption. Rack density and capacity will need to increase to keep up, and so too will energy and cooling requirements.
• Life Sciences: AI has the potential to speed up drug discovery, which could result in the need for new manufacturing facilities. At the same time LLE lead times remain challenging, so a selection of procurement models and scoping of packages continues to be critical.
• Commercial Real Estate: The commercial sector is experiencing a strategic shift as developers prioritize deep retrofits of existing assets in prime locations. This approach aims to enhance value and respond to evolving market demands.
• High Tech Industrial: There is limited availability of suitable sites that can accommodate developments of this size, which can range from 100ha to 400ha depending on project scale. A site must have a high-capacity, reliable, renewable energy source, connections to utilities and transport infrastructure to be considered well connected.

Download the full report today to access comprehensive insights and a forward-looking analysis of the construction market in Europe.