Construction sector is shrinking in 2024 but will recover for next two years; ABN Amro

The construction sector is going to shrink for the second year in a row this year but will grow again in 2025 before increasing more significantly in 2026. These predictions were made by ABN Amro in a new sector report about the sector.

Construction companies have struggled with high interest rates, full power grids, limited nitrogen space, an increase in construction costs, and staff shortages. But there is a need for new homes, and the construction of that will pick up speed next year, ABN Amro thinks.

ABN Amro reported that the construction sector has shrunk by two percent in 2024 but will grow slightly by 0.5 percent in 2025. This recovery will continue in 2026 when it grows by three percent, according to the bank. Production in the installation sector and the building materials industry is also expected to increase that year.

The housing construction will also see a resurgence in 2026, ABN Amro predicts. This is mainly because the market for renovating houses is increasing, and that market represents half of the housing construction.

This growth is mainly due to housing corporations making homes more sustainable. The increasing demand for new construction will also contribute to the expected growth in 2026.