When will there be an upswing?

There will be an upswing in the construction industry – the only question is when. 16% of timber construction companies expect a recovery this year, while 31% predict it for next year, and 27% in the year after. Thus, three out of four companies expect the construction industry to pick up again in 2027 at the latest. Despite the challenging conditions, almost half of the surveyed companies report a good order situation in the past quarter, and another 29% describe it as satisfactory. As for the second quarter, the majority (68%) expect no change in the order situation, while 22% think that there will be an improvement.

Divided market

Respondents’ assessments of the share of timber construction in the total construction volume of the industry is particularly positive, with two thirds expecting a further increase. Only 4% anticipate a decline. Companies see great potential particularly in the additions and extensions segment, where over 80% expect a very good to good development by 2030. Assessments are similarly positive for the segments addition of stories and renovations. Meanwhile, the single-family home segment is at the other end of the scale. Almost half of the surveyed timber construction companies expect a poor to very poor development here over the next five years.

Cost pressure and shortage of skilled workers

Despite this mostly positive general sentiment, the timber construction sector has numerous challenges to deal with, as illustrated by the responses to the question about the most pressing problems companies are currently facing. The sharp rise in material costs as well as high labor and non-wage labor costs were frequently mentioned by survey participants. 55% expect a further increase in prices for timber construction products in the second quarter. These price increases are often impossible to implement in the market due to subdued order levels and fierce competition for existing contracts. In addition, budget constraints on the client side are making the awarding of contracts more difficult. Bureaucracy, complex subsidy models, and requirements involved in public tenders are perceived as a significant burden. The shortage of skilled workers remains a key issue, which is being addressed through training, retraining, and employee retention measures. Many companies are also calling for a strengthening of their respective countries as business locations for the industry through stable political frameworks.