Spain’s construction sector is set to close 2025 with 4% year-on-year growth, outperforming other major European economies and marking one of its strongest performances since the 2008 financial crisis. This conclusion is drawn from the report Euroconstruct Winter 2025: The Spanish construction sector, moving against the trend, prepared by the Institute of Construction Technology of Catalonia (ITeC) in collaboration with the Federation of Construction Guilds.

According to the report, the sector is experiencing a period of strong momentum, supported by record-high confidence indicators, stable construction costs, and the positive impact of interest rate cuts. These factors have boosted both development activity and investment, driving a broad-based acceleration across real estate segments, from residential to non-residential, as well as large corporate transactions and the retail market.

By segment, residential construction leads growth, with an estimated increase of between 5.5% and 6%, reflecting persistent structural housing demand. Civil engineering is expected to grow by around 3%, while rehabilitation activity should rise by 1% to 2%. In contrast, non-residential construction is projected to grow more modestly, at just 0.8%.

At the European level, the report highlights a more cautious outlook. Private investment remains constrained by macroeconomic uncertainty, high costs and affordability challenges. After reaching record output levels in 2022, the European construction sector entered a downturn in 2023 and 2024, with 2025 expected to close with near-flat growth of around 0.3%.

Within this landscape, Germany continues to face the greatest difficulties in recovering from the 2023–24 recession, while Spain, the UK and Poland remain at the top of the European ranking, demonstrating greater resilience and growth capacity.

Looking ahead, growth in Spain is expected to moderate gradually, with forecasts pointing to 3.6% growth in 2026, 3.2% in 2027 and 2.2% in 2028, reflecting a natural normalisation of the cycle after several years of strong expansion.

At CG Capital Europe, we see these figures as a clear confirmation of the structural strength of the Spanish construction and real estate market, particularly in the residential segment, where supply constraints and robust demand continue to underpin activity. While growth is expected to moderate, the sector enters this phase from elevated activity levels, reinforcing its appeal for medium- and long-term capital, especially in well-located projects supported by strong fundamentals.

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