The construction industry in Europe is expected to be bolstered by the re-development and renovation activities in Western Europe and new construction activities in Eastern Europe, on account of greater economic stability in the continent.

Increasing construction activity augurs well for the prefabricated construction market and high growth in adaptability for prefabricated materials such as wood and concrete can be expected. Germany is the biggest market for prefab constructions in Europe, followed by Scandinavian countries and the United Kingdom. Despite Scandinavia being a key market for prefabricated homes, the prefabricated concrete market is expected to have limited growth, due to preference for wood as a prefab material. The setting time of concrete is a major factor that drives preference for other construction materials, especially in cold countries such as Denmark and Sweden. Setting of concrete is delayed in cold weathers, leading to delay in construction activities.

There is increased focus on developing construction projects in a more sustainable manner, so that the buildings constructed or re-developed have minimal environmental impact over the course of their lifecycle—right from construction until demolition. This has resulted in the development of a circular value chain for the construction industry in Europe, which is being adopted as a pilot project in countries such as Germany and the Netherlands. The focus on green development has also led to the adoption of practices such as certification of buildings as green buildings and certification of materials used in building and construction as green materials. Green building certifications adopted in Europe primarily constitute LEED and BREEAM and local certifications in individual countries such as Miljöbyggnad in Sweden and DGNB in Denmark. Regulations by entities such as Conformité Européene (CE) and EcoLabel in Europe affect the building materials market. These specifications aim to restrict the use of environmentally harmful chemicals to ensure product lifecycle sustainability.

Denmark and Sweden are Scandinavian countries with their individual focus on sustainable construction, as evident from the development of sustainable construction in Stockholm Port in Sweden and Sonderborg in Denmark. These have been identified as cities that have reduced carbon emissions by up to 25% by 2015 from that in 2008. The development of such cities is expected to drive the growth of passive homes in Europe, which are typically prefabricated using energy-efficient materials and fittings. Both Denmark and Sweden are compliant with Nordic Swan EcoLabel when it comes to regulations pertaining to the usage of green building materials for the construction of buildings.