The German Institute for Economic Research (DIW) predicts a promising future for the German construction sector, not least because the current situation is more than positive. The most recent forecast on construction volume shows that the construction sector is going to remain one of the most important pillars of Germany’s economy in the next two years.
“The segment construction of new housing units, should stagnate in 2020 and even contract in 2021. In the medium term, civil engineering is going to set the pace. However, growth is also noticeably less dynamic in this segment, too,” says ifo-expert Ludwig Dorffmeister, though.
According to Dorffmeister, the framework conditions remain favorable, though. Financing conditions are very attractive, the financial situation of public clients is good and the demand in investments in housing units and infrastructure is high.
Currently, construction activity is seeing an upward trend in all three central segments, i.e. residential and non-residential construction as well as civil engineering. In the area of residential construction as well as in commercial and public construction, order books are full and most companies are still optimistic.
There are country-specific obstacles. Due to a court ruling on nitrogen emissions, the Netherlands, for example, did not issue any building permits in wide areas of the country for many months in 2019. After this period, a new and very complex transitional procedure came into effect, which resulted in further massive delays in construction projects.
