Overall construction activity

Despite the unfavourable economic situation, overall construction activity was quite robust last year. Total construction output increased by 1½% in 2023. The increase in output was fully supported by the 1½% increase in construction employment. Productivity growth stabilises in 2023. 

The outlook for total construction activity this year is significantly worse. Total construction output is expected to contract by 3½% in 2024. The main factors behind this contraction are the decline in the number of permits issued, high interest rates and disappointing economic activity. The unfavourable economic environment is expected to lead to a 1½% decline in employment.

Residential construction

Total output of residential construction falls by around ½% in 2023. In line with the decline in building permits issued in recent years, the output of new residential construction decreased by 7% in 2023. The total number of completed dwellings was 68,000. This was not enough to accommodate the increase in the number of households due to foreign migration. The decline in construction output is mainly the result of high interest rates and increased construction costs. In addition, the lack of suitable building land makes it difficult to build new homes. In contrast, the output of residential renovation has increased by almost 6½% in 2023. Residential renovation has benefited from high energy prices and increased public spending to support sustainability programmes. The sustainability programmes provide incentives to invest in energy-efficient and sustainable dwellings. Finally, the output of residential maintenance increases by 2½%.

In 2024, the outlook for residential construction deteriorates. Output in residential construction is expected to fall by 4%. The contraction in output is mainly the result of an 11% fall in the number of permits issued in previous years. In addition, high interest rates are squeezing the borrowing capacity of potential homeowners.

Non-residential construction

Non-residential construction grew by 2% in 2023. This overall increase in output in non-residential construction is the result of favourable developments in both new residential construction and non-residential renovation. The output growth in renovation is mainly driven by increased investment in insulation of non-residential buildings and increased installations of sustainable heating systems. 

Non-residential construction is expected to decline by 4% in 2024. The contraction is mainly driven by the decline in new non-residential construction. High interest rates, insufficient growth in economic activity and world trade, and increased construction costs are creating barriers to the construction of commercial and logistics buildings. Nevertheless, the construction of educational buildings is still expected to grow in 2024. This is mainly the result of major investment programmes by universities.

GDP 2023




Total investment in construction in 2023


Civil engineering

After two years of contraction, civil engineering had a solid year with output growth of 3½%. The increase in output is mainly driven by network companies, which are increasingly investing in energy infrastructure. In addition, public spending by the national government has increased by 2% in 2023. As a result, new construction and reconstruction within the civil engineering sector will grow by 4%, while maintenance will increase by 3% in 2023.

In 2024, output in civil engineering is expected to fall by 1% as a result of the contraction in new construction and reconstruction. The contraction is mainly the result of a decline in work done for hire by local authorities. The main reasons for the decline in work done for hire by local authorities are the continuing impact of higher construction costs on budgets and the reduced development of sites due to the fall in new housing construction. 

Prices of construction materials

The prices of construction materials show very different trends in 2023. The price of steel has stabilised since the second half of 2023. On the contrary, the prices of cement and bitumen have risen since the beginning of 2023. Finally, the price of wood has fallen since the beginning of 2022.

Per cent variation of investment in real terms of previous year


Number of building permits in residential construction