Greece’s construction output year-on-year (YoY) growth rebounded sharply to 7.20% in September 2025, reversing two consecutive quarters of contraction. This figure notably outpaced the consensus estimate of -4.00% and the prior quarter’s -3.50% decline, according to the latest data from the Sigmanomics database. The rebound signals renewed momentum in the construction sector, a key driver of Greece’s economic recovery and employment.

Drivers this month

• Public infrastructure projects accelerated, contributing approximately 3.10 percentage points (pp) to growth.
• Residential construction expanded by 5.50% YoY, adding 2.40 pp.
• Commercial building activity stabilized after a prior slump, contributing 1.70 pp.

Policy pulse

The reading sits well above the central bank’s inflation target zone, reflecting robust sectoral demand despite tighter monetary conditions. The Bank of Greece’s recent rate hikes have yet to dampen construction activity significantly.

Market lens

Immediate reaction: EUR/USD strengthened 0.30% post-release, reflecting improved growth prospects. The 2-year Greek government bond yield tightened by 8 basis points, signaling reduced risk premia amid optimism.

Construction output is a vital macroeconomic indicator for Greece (GR), reflecting investment trends and economic health. The 7.20% YoY increase in September 2025 contrasts sharply with the -3.50% contraction in June 2025 and the -4.00% consensus forecast, underscoring a strong rebound. Historically, construction output in Greece has been volatile, with peaks such as 24.20% YoY growth in June 2023 and troughs like the recent negative prints.

Monetary policy & financial conditions

The Bank of Greece has raised policy rates by 125 basis points since early 2025 to combat inflationary pressures. Despite this, financial conditions remain moderately accommodative due to ECB’s supportive stance and improved credit availability for construction firms. The sector’s resilience suggests that monetary tightening has yet to fully transmit to investment decisions.

Fiscal policy & government budget

Fiscal stimulus through increased public infrastructure spending has been a key driver. The government allocated an additional €1.20 billion in the 2025 budget for transport and energy projects, supporting construction output. This fiscal push offsets headwinds from tighter monetary policy and external uncertainties.

External shocks & geopolitical risks

Geopolitical tensions in Eastern Europe and energy price volatility pose downside risks. However, Greece’s diversified supply chains and EU funding buffers mitigate immediate shocks. The construction sector benefits from EU Recovery Fund disbursements, cushioning against external shocks.

Chart insight

The chart illustrates a cyclical pattern with sharp swings in construction output, influenced by fiscal stimuli and monetary policy. The recent uptick suggests a potential stabilization phase, reversing the two-quarter decline.

Market lens

Immediate reaction: EUR/USD strengthened 0.30% following the release, reflecting improved growth prospects. Greek 2-year bond yields tightened by 8 basis points, signaling reduced risk premia. The Greek drachma proxy currency showed modest appreciation, consistent with positive sentiment.

Looking ahead, construction output in Greece faces a mix of opportunities and risks. The sector’s rebound aligns with ongoing fiscal support and gradual normalization of financial conditions. However, external uncertainties and monetary tightening could temper growth.

Bullish scenario (30% probability)

• Continued fiscal stimulus and EU Recovery Fund inflows boost public and private construction.
• Monetary policy stabilizes, allowing credit growth to support investment.
• Output growth accelerates to 10-12% YoY by Q1 2026.

Base scenario (50% probability)

• Construction output grows steadily at 5-7% YoY through 2026.
• Monetary tightening gradually impacts investment but is offset by fiscal measures.
• Sector remains resilient amid moderate external headwinds.

Bearish scenario (20% probability)

• Geopolitical shocks and energy price spikes disrupt supply chains.
• Monetary policy tightening curtails credit availability sharply.
• Output contracts again, falling below 0% YoY by mid-2026.

The September 2025 construction output YoY figure of 7.20% marks a meaningful recovery for Greece’s construction sector. Supported by fiscal spending and resilient financial conditions, the sector is poised to contribute positively to economic growth. However, vigilance is warranted given external risks and monetary policy tightening. Investors and policymakers should monitor upcoming data closely to gauge sustainability.

Overall, the construction sector’s rebound offers a cautiously optimistic signal for Greece’s broader economic trajectory in the near term.

Key Markets Likely to React to Construction Output YoY

The construction output YoY reading is a bellwether for Greece’s economic health and investment climate. Markets sensitive to growth and credit conditions tend to react swiftly. Key tradable symbols include:

• ELPE – Greek energy sector stock, correlated with infrastructure demand and construction activity.
• EURUSD – Euro-dollar pair, sensitive to Greek growth prospects within the Eurozone.
• BTCUSD – Bitcoin, often reacts to risk sentiment shifts triggered by macroeconomic data.
• ATHEX – Athens Stock Exchange index, directly impacted by domestic economic activity.
• USDEUR – Dollar-euro pair, inverse to EURUSD, reflecting currency market dynamics post-data.

Insight Box: Construction Output vs. ELPE Stock Performance Since 2020

Since 2020, Greece’s construction output YoY growth has shown a positive correlation with ELPE stock performance. Periods of rising construction activity, such as mid-2023’s 24.20% surge, coincided with ELPE’s upward momentum, driven by increased infrastructure demand and energy projects. Conversely, downturns in construction output, including the mid-2025 contraction, aligned with ELPE’s price dips. This relationship underscores ELPE’s sensitivity to domestic investment cycles and infrastructure spending.

FAQs

What does the Construction Output YoY indicator measure in Greece?

The indicator measures the year-on-year percentage change in the total volume of construction activity, reflecting investment and economic health in Greece.

How does Construction Output YoY impact Greece’s monetary policy?

Strong construction output can signal economic overheating, influencing the Bank of Greece to tighten monetary policy, while weak output may prompt easing to stimulate growth.

Why is Construction Output YoY important for investors?

It provides insight into economic momentum, infrastructure demand, and credit conditions, helping investors gauge sectoral and broader market trends.

Key Takeaway

Greece’s construction output YoY growth of 7.20% in September 2025 signals a robust sector rebound, supported by fiscal stimulus and resilient financial conditions, but external risks and monetary tightening remain key uncertainties.