Construction outlook: navigating risk and opportunity with surety

The European construction sector is navigating a challenging environment.

Higher energy and material costs, labour shortages and financing pressures can all affect contractors’ ability to deliver projects as planned. At the same time, investment in infrastructure, energy and digital projects is creating opportunities in selected areas.

Understanding these developments can help construction companies prepare for changing market conditions and future project requirements.

What is shaping the European construction market?

The latest Atradius report, Industry trends construction August 2026, forecasts construction output growth across the EU and the UK to slow to 0.5% in 2026, down from 1.0% in 2025.

The picture varies across individual markets. Construction output is expected to contract in Germany, France and the UK in 2026, while Italy continues to record moderate growth.

Cost and capacity pressures remain another concern. Rising material costs continue to affect contractors’ margins, while shortages of skilled workers constrain capacity across many markets. Credit risk also remain elevated across much of the European construction sector.

At the same time, opportunities are emerging in specific areas. Investment in transport, energy infrastructure, electricity networks and digital projects is supporting activity across several markets, although tighter public finance may constrain infrastructure spending elsewhere.

For construction companies, this combination of modest growth, cost pressures and selective opportunities makes financial resilience particularly important.

What does this mean for companies using surety?

Changing market conditions may affect not only individual projects, but also the overall risk profile of a contractor’s portfolio. Costs increases, delays and capacity constraints may put additional pressure on project execution and financial resources.

In this context, surety remains an important part of the constractual framework for construction projects. Bonds support contractors in meeting bonding requirements when bidding for or executing projects.  As project portfolio evolves, so do bonding needs. Companies may therefore need to consider their bonding requirements alongside wider financial and operational planning.

Looking beyond individual projects

For construction companies, surety can therefore be more than a requirement for individual contracts.

In our recently published article, How construction companies can use surety to unlock growth, we take a broader look at the role surety can play beyond individual contractual requirements.

The article explores how construction companies can incorporate surety as part of their strategy as they pursue larger projects, develop new business, or expand in new sectors and markets.