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Report from
Europe
European construction remains under pressure
Public investment and lower interest rates are not expected
to accelerate growth significantly in the EU housing
market in 2025. This is the conclusion of Eurofer, the
European Steel Association, for whom members
construction is a key market accounting for 35% of total
European steel consumption.
Having previously forecast that EU construction output
would grow 2% this year, in its latest report, Economic
and Steel Market Outlook 2025-2026, Q2, it has
downgraded this to 1.1% in 2025. In 2026 it expects
sector growth to slow slightly to 0.8%.
It cites the key reason for this as the lacklustre
performance of house building, with residential new build
investment now having declined for the ninth quarter in a
row. This is despite the fact that the European Central
Bank made seven consecutive policy rate cuts in 2024-
2025. Regardless, mortgage rates remain relatively high
and housing demand remains slow.
“While overall construction activity is expected to
continue benefitting to a limited extent from governmental
housing support and public construction schemes, the
impact of these publicly funded projects eased somewhat
during 2024,” states Eurofer
The ‘other construction’ non-housing sector is looking
marginally more positive, expected to grow at a ‘moderate
pace’ in 2025. Public construction, says Eurofer, will be
boosted by ‘accelerated implementation of Next
Generation EU-related public investment schemes which
must be completed before 2026, including public
expenditure in construction’. In particular this has
underpinned civil engineering investment, which grew
1.5% in Q4 2024 after rising 0.3% in Q3. Eurofer also
expects some additional industry support from ‘greater
flexibility in EU fiscal rules’.
Despite this, says Eurofer, the overall construction activity
index has been declining for four consecutive quarters,
with labour shortages in some EU countries and rising
costs adding to the brakes on the sector. The industry
confidence index, it reports, has remained in the negative
zone since March 2022.
Meanwhile, according to a Hamburg Commercial Bank
Purchasing Managers Index (HCOB PMI) release on July
4, the Eurozone construction sector recorded a further
decline in activity at the end of Q2 2025, with the rate of
contraction strengthening compared to that seen in May.
“A sharp decrease in output was driven by a steep
reduction in new orders, with downturns quickening in the
housing and commercial sectors,” says the release,
although, it adds, the civil engineering sector bucked the
wider trend and registered expansion.
Overall, says HCOB, Eurozone construction companies
‘remained in retrenchment mode, as employment and
input buying were reduced again, while businesses
registered renewed pessimism regarding the outlook for
output over the coming 12 months’.
Construction cost pressures, also edged higher during June
to reach their most pronounced for 18 months.
The HCOB Eurozone Construction PMI Total Activity
Index — a seasonally adjusted index tracking monthly
changes in total industry activity — fell from 45.6 to May
to 45.2 in June.
See:
https://gmk.center/en/news/eu-construction-sector-to-remain-
weak-in-2025-eurofer/
and
https://www.eurofer.eu/assets/publications/economic-market-
outlook/economic-and-steel-market-outlook-2025-2026-second-
quarter/EUROFER-Economic-Report-Q2-2025.pdf
and
https://www.pmi.spglobal.com/Public/Home/PressRelease/28e61
44f0cfb40598e7d1c22cc2539de
Positivity in French timber building
Despite a deep downturn in the France’s wider
construction market the turnover of the timber building
sector increased in 2024, albeit marginally. That is
according to the latest biennial report on the industry from
Codifab, the French Professional Committee for the
Development of the French Furniture and Timber
Industries. Moreover, the country’s timber builders are
expecting market improvement through 2025 and beyond.
France is reported to need to build 400,000 new homes to
meet the country’s housing requirements. But last year
according to online construction news platform
Batinfo.com, just 59,014 were built and put on sale, 29%
less than in 2023 and half as many as in 2022. Between
June 2023 and June 2024, 30,500 building jobs were lost.
Government measures to boost the building industry and
general economic improvement are expected to result in a
gradual turnaround through 2025. But according to Pascal
Boulanger, President of the French Federation of Real
Estate Developers: "It will take between two and three
years to get the machine going again”.
Timber-based house building volume was not immune to
France’s slow-moving economy. In fact, timber framed
units completed were down in volume 17% at 18,250, but
that was some way below the steep slump in house
construction generally.
New building construction accounted for 71% of timber
building sector revenues, split 56%/44% between
residential and non-residential projects. The most difficult
market was for individual private family housing, where
7,000 properties were completed in 2024, down 27.5% on
two years ago.
A total of 1,350 individual stand-alone timber-based
homes in multi-family housing developments were
completed, down 25% on 2022, and 9,900 multi-family
housing units, an 8% fall. The contraction in housing
volumes was partly offset by growth for timber builders in
businesses in repair, refurbishment and maintenance work,
which was up in value 9% on 2022.
And against this challenging back drop, however, says the
report commissioned by Codifab from market analysts
Xerfi Specific, the French timber construction industry
saw turnover rise 0.5% to over €4.6 billion. This, it
maintains, resulted from increased sales of higher end
timber-based properties. Of the 987 timber building
companies which took part in the survey for the report
19% said that they had completed projects with a timber
structure package worth over €500,000. That compared
with 17% in 2022.
The French construction market remains challenging into
2025, but according to the report, confidence among
timber builders that conditions will improve is growing
with 36% of businesses in the sector planning to increase
investment in the next two years.
Also boding well for the industry, the Codifab report says,
is its increasing technical proficiency and the capacity of
an increasing number of companies to undertake the whole
construction process, from design, through to delivery and
erection on site.
This ‘industrialised organisation’, it adds, puts the sector
in a strong position to undertake the transition, which is
taking place across Europe, to off-site construction where
key components and assemblies of timber buildings are
prefabricated in controlled factory conditions boosting
quality and speeding up erection. Industry positivity about
the future is further reflected in recruitment plans of
companies, with 48% of respondents to the report survey
planning to hire in the next 12 months.
Codifab concludes that French timber building is a ‘solid,
resilient’ business successfully transitioning to a higher
tech, more sophisticated industry model.
See: https://www.codifab.fr/actions-collectives/enquete-
nationale-de-la-construction-bois-2025
and
https://www.codifab.fr/
and
https://batinfo.com/en/actuality/The-housing-crisis-is-getting-
worse-in-France-with-a-drop-in-construction-of-29-in-
2024_31396
European flooring market bottomed out in 2024
Contraction in the European wood flooring consumption
slowed in 2024 and started stabilising following a
dramatic fall in sales in 2023. The sector also anticipates
EU anti-dumping measures against ‘unfairly priced’
imports will improve market conditions. This is according
to the latest report on the market from FEP, the European
Federation of the Parquet Industry published in June.
FEP has 82 members in more than 20 countries,
comprising 53 manufacturers, eight national federations,
and 23 suppliers.
It reported that European wood flooring consumption
continued to decrease last year reflecting ‘still subdued
construction activity and increased pressure from Chinese
imports’. But FEP contends that the market ‘seems to have
reached the bottom’ of its downturn.
Production in FEP countries fell by 5% in 2024 to 51.5
million sq.m, while European production outside FEP
countries was 10.7 million sq.m, up from 10.35 million sq.
m.
“Taking into account the total production in Europe (FEP
countries plus non-FEP countries in Europe) implies that
production in 2024 dropped by 4% to 62.2 million sq.m,”
says FEP.
In terms of wood species use in 2024, oak’s dominant
share of FEP country manufacture increased slightly to
84% from 83% in 2023.
Tropical wood species use was stable at 2% of flooring
production, but FEP says that tropical timber might also be
included in what manufacturers reported as ‘other wood
species’, which comprised 3% of total FEP country output.
After oak, ash and beech remain the two most popular
species for wood flooring in FEP countries accounting for
4% and 2.5% of output respectively.
The leading FEP timber flooring producer in 2024 was
Poland, accounting for 20% of total FEP country output,
next came Austria with 16%, Sweden 11%, Italy 8% and
Germany 8%.
In terms of product type, multi-layer wood flooring
remained the mainstay of FEP country output, accounting
for 83% of production compared to 84% in 2023.
Solid wood flooring came next, up from 14% in 2023 to
15% last year. Mosaic flooring was approximately stable
at 2% of output.
Following a 5% fall in 2023, FEP country timber flooring
consumption fell a further 4.5% in 2024 to around 60
million sq. m. The biggest market was Germany,
accounting for 22% of FEP country consumption,
followed by Italy with 12%, Sweden 10% and Switzerland
9%.
FEP area wood flooring consumption per capita was 0.14
sq.m. The biggest consumers were those of Austria,
followed by those of Switzerland, Estonia, Croatia, and
Sweden.
Looking forward, FEP says members are expecting the
sector to be buoyed by an upturn in construction activity,
albeit gradual, later in 2025. Shorter term, it says, they
expect to get ‘much-needed relief’ from the imposition of
the provisional anti-dumping measures by European
Commission earlier this year against imports of multilayer
wood flooring originating in China.
FEP says that Chinese competition has had a significant
impact on European manufacturers. “As [European]
consumers’ purchasing power has been hit, cheaper
alternatives such as fake wood floorings have been more
frequently considered as well as unfairly priced parquet
from Chinese origin,” it says. FEP backed the level of
provisional EU anti-dumping duty on Chinese flooring
introduced in January of 42.3% to 49.2%.
“The level provides the necessary relief to an industry
which has been suffering the severe effects of unfair
imports from China,” said FEP managing director Isabelle
Brose. “It is sensible and appropriate as it reflects
significant price differences resulting from massive
overcapacities and market distortions in the Chinese
industry.
Leading up to the introduction of provisional anti-dumping
duty, increased EU imports of multilayer parquet from
China were reported, potentially, says FEP with the aim of
building-up stocks before duty was imposed. “Such
imports could, however, be made subject to retroactive
collections of the anti-dumping duties, if the legal criteria
are met,” it says.
FEP says it will ‘continue actively cooperating’ with the
European Commission’s investigation team assessing to
what degree the pricing of Chinese multi-layer wood
flooring constitutes unfair competition. It says the
investigation is expected to reach formal completion on
July 15.
See: https://www.parquet.net/2025/06/europe-parquet-market-
2024.html
and
https://www.parquet.net/2025/04/european-parquet-
markets-stabilising.html
Barometer positive on Spanish timber trade
investment
A state of trade ‘barometer survey’ conducted by Spanish
timber sector association AEIM at its June 12 board of
directors meeting indicated some positivity on the market
outlook.
At the event at the ADIMME Technical Institute in
Valencia, board members completed a real-time online
survey canvassing their views on market trends and
prospects for the wood and timber products sector.
On the question of how sales volumes from January-June
2025 compared to the same period last year, 50% said they
had seen an increase of up to 10%, 30% said levels were
comparable, 10% reported a decrease of up to 10% and
10% a decrease of more than 10%.
On stock levels of timber, wood products and wood-based
panels in the first six months of 2025, 30% of members
said they were higher than in the same period last year,
40% said they were around the same and 30% said they
were lower.
Payment defaults in the period were reported to have
increased by 10% of participants in the survey, while 90%
said the incidence was about the same as the period in
2024.
Requests for quotes were reported up by 50% of
participants, around the same level as the first half of 2024
by 10% and lower by 40%.
Supply problems or extended lead times were reported by
11% of board members on African and South American
tropical timber, but the same percentage said they’d
experienced these issues with European softwood,
American softwood and on panel products. And 44% of
barometer participants gave a ‘not applicable’ response on
the issue.
Asked for a general sales forecast for the second half of
2025, 10% responded that they expected an increase of
more than 10% on the first half of the year, 40% an
increase up to 10%, 30% similar sales levels, 10% a
decline up to 10% and 10% a decline of more than 10%.
Asked whether their companies planned investment in the
second half, 70% said yes, 30% no and 10% said they
planned to recruit more personnel, while 90% said they
did not.
See: https://www.aeim.org/index.php/2025/06/23/barometro/
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