Luxembourg's construction sector shows no signs of recovery in 2025, with plunging permit approvals and off-plan sales reaching crisis levels, according to a sobering new report from the Chamber of Skilled Trades and Crafts.

Midway through the year, Luxembourg's construction sector continues to face significant challenges, according to an assessment by the Chamber of Skilled Trades and Crafts. The Chamber has raised concerns about the sector's impact on national economic growth and its long-term stability.

While early 2025 saw optimism about a potential recovery in off-plan property sales, the Chamber cautioned on Wednesday that the industry's situation remains difficult. In its August economic outlook report, it noted a near "halt in new housing" developments. This observation aligns with recent analysis by Julien Licheron, a researcher at the Luxembourg Institute of Socio-Economic Research (LISER), who highlighted similar concerns in an interview with our colleagues from RTL Infos.

Although late 2024 saw a modest increase in new housing sales, the Chamber emphasised that these figures remain "well below pre-crisis levels." The uptick was partly attributed to the anticipated expiration of the housing package in December 2024 – a deadline later extended to 30 June 2025. Another sales surge is expected in Q2 2025 (based on Housing Observatory data), likely driven by this new cutoff date.

However, the Chamber warned against interpreting these fluctuations as evidence of a lasting recovery, stressing that they do not signal a "sustainable return of buyer and investor confidence."

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A "persistent" crisis

The Chamber of Skilled Trades and Crafts describes the current situation as a "stalemate", highlighting what it calls "the persistent nature of the housing crisis." The organisation warns that the ongoing slump in demand for off-plan properties – a key driver of construction activity – cannot be overlooked, as it is triggering "a gradual deterioration in companies' financial health and sector-wide employment."

The Chamber's economic report points to stark figures as evidence: Only 253 off-plan sales were recorded in Q1 2025, a drop of nearly 5,850 units compared to the 2016–2020 average.

Prospects remain bleak for the sector, which has faced declining conditions for over two years. Building permits – a critical indicator of future construction investment – plummeted by 45% between Q4 2024 and Q1 2025. Compounding these challenges, employment in the sector continues to shrink.

With little optimism to offset these trends, the Chamber's report title sums up the outlook: "No Notable Improvement on the Horizon for Construction."