The construction sector will grow 2.3% worldwide in 2026 and in Europe growth will be 1.6% driven by the residential sector, according to a report from insurance company Crédito y Caución.
“The construction sector will grow by 2.3% in 2026 worldwide, in the case of Europe, it is expected to increase by 1.6%. The residential subsector will be boosted by interest rate cuts approved by the European Central Bank”, the report reads.
In the Eurozone and the United Kingdom, material costs will remain higher than in the past and labor shortages are structural, with both issues having a negative impact on manufacturers’ margins and corporate credit risk, which remains high in most European markets, according to the insurer.
The report highlights France as a country at risk as “the sector lacks significant growth drivers and political instability is affecting its growth”.
Another of the countries with the highest level of risk is Germany, where the sector’s performance continues to be affected by weak economic growth and the level of defaults remains high.
Between January and October 2025, the number of insolvencies increased by 9.3% compared to the previous year.
“In the UK, many new construction projects continue to be delayed due to old contracts, supply chain issues, price inflation and delays in approval of licensing applications. In the coming months, some improvement in the credit risk situation in the sector is expected, but market conditions remain challenging,” the report states.
Crédito y Caución also believes that although the construction sector is not directly affected by the new tariff rates and geopolitical tensions, “it suffers their collateral impact, global trade issues have increased business uncertainty, leading to a reduction in spending on commercial construction in many countries”.
The countries with the highest levels of credit risk are Austria, Denmark, France, Hungary, Sweden, Turkey, the United Kingdom and South Korea.
Crédito y Caución is present in Portugal, Spain and Brazil. In the rest of the world it operates as Atradius, being a global credit insurance operator present in more than 50 countries.
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