FIGURE 1: REAL GDP GROWTH (% AVERAGE ANNUAL) FOR SELECT MARKETS IN 2025 AND 2026
Macro-Economic Review and Market Outlook Economy
4.5%
2026 2025 2015 - 19 AVERAGE
3.5%
2.5%
ECONOMIES ACROSS EUROPE, THE MIDDLE EAST AND AFRICA HAVE ENDURED A BARRAGE OF HEADWINDS OVER THE COURSE OF 2025 BUT CONTINUE TO SHOW THEIR RESILIENCE. Active conflicts and the threat of new ones, rising geopolitical risks and wide ranging U.S. tariffs on imports generated notable challenges. Consequently, trade has been “choppy” and supply chains have been challenged regularly. Despite this, growth has remained robust with the Euro area estimated to have grown by 1.5% in 2025 on an average annual basis, marking the region’s strongest calendar year since 2022. Such growth has been supported by low unemployment and comparatively strong consumption. Entering 2026, many of these challenges remain and recent changes to the tariff environment, together with escalating conflict in the Middle East, add new headwinds. Prior to these events, economic growth was forecast to slow, but trajectories will vary between markets. Germany is expected to see ongoing improvements, buoyed by fiscal stimulus and increased government spending, while recent out-performance in Spain is forecast to continue, though normalise over the next 24 months. Consumers remain central to the story. Household spending will gain support from low inflation, interest rate cuts in the U.K. and wage increases. High household savings pose both upside and downside risks, depending on whether consumers opt to spend or hold back. At the same time, trade is likely to remain a complicating factor, with knock-on effects for supply chains and, potentially, material price.
1.5%
0.5%
POLAND
PORTUGAL NETHERLANDS SWEDEN BELGIUM
ITALY
GERMANY
SPAIN UNITED KINGDOM EURO ZONE LUXEMBOURG FRANCE
Source: Moody’s Analytics; Cushman & Wakefield
Interestingly, despite heightened global economic policy uncertainty, businesses became notably more confident toward the end of 2025, which has been largely maintained into the current year. The recovery in sentiment in Europe has been broad-based and points to a cyclical upturn. Business investment remains key to ongoing improvements with defence and AI firmly in the spotlight. Of course, there are any number of risks to this outlook. However, the region has successfully absorbed a barrage of shocks so far, and if 2025 was a year of resilience, 2026 may be the year in which that resilience is rewarded.
DE LAGE LANDEN (DLL) - ITALY
4
5
Cushman & Wakefield
EMEA Office Fit Out Cost Guide 2026
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