Extreme summer weather: what does it mean for euro area construction output?

Prepared by Johannes Gareis

The summer of 2026 brought repeated and prolonged episodes of extreme heat to large parts of the euro area, with potentially significant implications for construction activity. Construction is among the sectors most exposed to weather conditions, as much of its activity takes place outdoors and involves physically demanding work. High temperatures make it harder to work safely, and workers in climate-exposed industries such as construction have been found to reduce their working hours on very hot days, partly by shifting activity to cooler periods within the same day or to other days.^[1] The impact on working hours may be exacerbated by regulations, as several euro area countries now require outdoor work to be adapted or suspended during periods of extreme heat.^[2] Recent econometric evidence also finds that extreme weather events can have sizeable short-term effects on economic and sectoral activity in the largest euro area economies.^[3] This box assesses the implications of this summer’s weather for euro area construction output, drawing on the European Commission’s business survey as a timely indicator of weather-related disruption and on historical evidence of the impact of this disruption on output.

The share of construction firms citing weather as a factor limiting their activity reached exceptionally high levels this summer. Weather-related constraints are predominantly a winter phenomenon: in the euro area, the share of firms reporting such constraints averages over 20% in January and February, compared with less than 3% in July and August (Chart A). This year, however, the pattern was different. While weather constraints remained within their usual range in the first months of the year, they rose significantly over the summer. In August, 7.8% of firms cited weather as a limiting factor, the highest August reading since the series began in 1991 and well above the previous peak of 5.8%. The July reading, at 7.0%, was the second highest on record for that month. Constraints eased to 5.5% in September, but remained above their usual level for the time of year, marking the third highest September reading since 1991. The increase was broad-based across countries – although uneven. It was particularly pronounced in France, where readings reached record highs in each of the three months, possibly also reflecting the new rules on working during heat alerts. Weather constraints also rose markedly in Germany in August and were elevated in Italy, as well as in several smaller countries such as Lithuania, Croatia and Slovenia, while remaining close to or below their usual levels in Austria, Belgium and Finland. In September, readings also reached a record high in Greece.

Chart A

Weather as a factor limiting construction activity in the euro area

(percentages of respondents)

Historical evidence suggests that the impact of this summer’s unusually high weather-related constraints on construction output is likely to be small and temporary. To quantify this impact, the relationship between weather-related constraints and construction output is estimated using monthly data for three construction subsectors in the 11 euro area countries for which production data by subsector are available, over the period 1995-2026.^[4] Weather disruption is measured as the deviation of the survey share from its average for the same calendar month, thereby removing normal seasonal patterns. The estimates suggest that a 1 percentage point increase in the share of firms reporting weather constraints relative to historical levels for that time of year is associated with construction output being around 0.05% lower in the same month. The estimated effect is short-lived, with output recovering in the following month, consistent with postponed work being made up rather than permanently lost. Applying these estimates to this summer’s readings suggests that weather disruption lowered construction output by around 0.2% in July, 0.3% in August and 0.1% in September, with the estimated effect unwinding thereafter (Chart B).^[5] These figures refer to the estimated impact of the weather alone, with actual monthly outturns also reflecting other factors. Overall, they imply only a limited drag on construction output in the third quarter as a whole, followed by a corresponding rebound in the fourth quarter, and hence a negligible effect on general economic activity.

Chart B

Estimated effect of the summer 2026 weather disruption on euro area construction output

(percentage deviation of the level of output)

There is, however, considerable uncertainty around the estimated impact of extreme summer heat. The estimates are based mainly on episodes of weather disruption in the colder months of the year, which account for around 70% of large disruptions in the sample, and the response to extreme heat may differ from cold-weather disruption.^[6] Moreover, the stricter heat-related health and safety rules introduced in several countries in recent years post-date most of the estimation sample and could make construction activity more sensitive to high temperatures than in the past. Conversely, firms may partly attribute weaker activity to the weather even when other factors are also at play, in which case the estimates could overstate its effects. Irrespective of this, the estimates only capture short-term disruptions. However, if extreme heat becomes more frequent or more prolonged, postponed work may become harder to make up, while recurring restrictions on working hours and the costs of adapting to them could weigh more persistently on construction activity. Extreme heat may also affect economic activity more broadly over longer horizons.^[7]

Overall, the evidence suggests that this summer’s extreme weather caused unusually widespread disruption to construction activity, but that its effect on output is likely to have been small and largely temporary. Weather-related weakness in construction data for the third quarter should therefore not necessarily be interpreted as signalling weaker underlying momentum. With extreme summer heat projected to become more frequent and longer-lasting, survey information on weather-related constraints can provide a timely indication of temporary weather effects and help distinguish them from underlying developments in construction activity.

References

Andersson, M., Battistini, N. and Bobasu, A. (2026), “Heatwaves, coldwaves, floods, and droughts: the short-term impact of extreme weather events on economic activity”, Working Paper Series, No 3203, ECB, Frankfurt am Main, March.

Graff Zivin, J. and Neidell, M. (2014), “Temperature and the Allocation of Time: Implications for Climate Change”, Journal of Labor Economics, Vol. 32, No 1, pp. 1-26.

International Labour Organization (2019), Working on a warmer planet: the impact of heat stress on labour productivity and decent work, International Labour Office, Geneva.

Jordà, Ò. (2005), “Estimation and Inference of Impulse Responses by Local Projections”, American Economic Review, Vol. 95, No 1, pp. 161-182.

Usman, S., González-Torres Fernández, G. and Parker, M. (2025), “Going NUTS: the regional impact of extreme climate events over the medium term”, European Economic Review, Vol. 178.

Legal Disclaimer:

EIN Presswire provides this news content "as is" without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the author above.