Construction output across the European Union fell in July, although Cyprus continues to record strong building activity, with permits and construction costs both rising in recent months.

Seasonally adjusted construction production decreased by 0.3 per cent in the EU in July compared with June, while output in the euro area was unchanged, according to first estimates released by Eurostat on September 18.

The figures followed a sharper decline in June, when construction production fell by 1.3 per cent in the EU and 1.5 per cent in the euro area.

Compared with July 2025, construction production was down by 1.8 per cent in the EU and 2 per cent in the euro area.

Within the euro area, building construction was unchanged month-on-month in July, while civil engineering increased by 0.6 per cent and specialised construction activities fell by 0.1 per cent.

Across the EU, building construction declined by 0.4 per cent, civil engineering by 0.9 per cent and specialised construction activities by 0.2 per cent.

Hungary recorded the largest monthly decline at 4.7 per cent, followed by Poland and Sweden at 3.8 per cent each and Austria at 2.2 per cent.

Belgium recorded the strongest monthly increase at 2.8 per cent, followed by the Czech Republic at 2.1 per cent and Slovakia at 1.9 per cent.

On an annual basis, euro area building construction fell by 6.4 per cent, while civil engineering rose by 0.6 per cent and specialised construction declined by 1.6 per cent.

Across the EU, building construction fell by 5.6 per cent, civil engineering by 0.4 per cent and specialised construction activities by 1.5 per cent.

Hungary recorded the largest annual decline at 12.2 per cent, followed by Spain at 9.7 per cent and France at 5 per cent.

Finland recorded the strongest annual increase at 12.8 per cent, followed by Slovenia at 11.6 per cent and Bulgaria at 4.8 per cent.

Eurostat’s July figures do not provide a comparable monthly production figure for Cyprus, but domestic indicators point to continued expansion in building activity.

The Cyprus Statistical Service (Cystat) reported that 735 building permits were authorised in May, an annual increase of 21.1 per cent, with the permits covering 352,126 square metres and 1,847 dwelling units.

During the first five months of 2026, 3,650 permits were issued, up 32.1 per cent from the same period of 2025, while their total value increased by 43.9 per cent to €2.10 billion and authorised floor area rose by 43.1 per cent to 1.70 million square metres.

The number of planned homes increased by 63.7 per cent to 8,978 during the period, according to Cystat.

At the same time, construction costs remain a pressure point for the sector, with Cystat reporting on Friday that its construction materials price index rose 3.39 per cent year-on-year in August and 0.07 per cent from July.

The combination of strong permitting activity and higher material costs comes as Cyprus’ property market continues to expand, with developers and policymakers also facing concerns over housing affordability and the availability of new homes.

Cystat is due to publish Cyprus’ construction production and output price indices for the second quarter of 2026 on October 5, providing a more direct comparison with the wider European construction figures.