© Holzkurier
In the Holzkurier’s latest economic survey, 40% of respondents only expect a sustained upswing in construction in 2027. 19% expect a recovery as early as 2026 – the rest only in 2028 or even later. Ultimately, interest rate trends as well as numerous other factors, such as energy and material prices or the local and global political framework conditions, will determine when there will be an actual upswing. At the moment, a mixed picture emerges in the DACH region, with Swiss timber construction companies appearing to perform best.
The situation is particularly tense in Austria. Since early 2022, real-term investment in residential construction has decreased by around 20%. According to Statistik Austria, over 9,000 building permits were issued for new projects in the second quarter of 2025, that is 18% more than in the same period of 2024. Nevertheless, permits remain 43% below 2021 levels. “In multi-story residential construction in particular, there is currently a standstill,” a major Austrian timber construction company reports, adding that the few large-scale projects in other sectors are fiercely contested and business has lately been done on very short notice. “What used to take six months to a year now has to be completed in one or two months. This is only possible with enormous effort and thanks to the very short delivery times of our partners, who are also struggling with the economic downturn.”
The situation is different in Switzerland. Many timber construction companies there are operating at full capacity, and larger projects are being implemented on a regular basis. “Over the past ten years, there hasn’t been a significant slump in timber construction activity,” a Swiss industry expert summarizes.
Boost for serial prefabrication
In Germany, residential building permits totaled 131,800 from January to July. According to Destatis, this corresponds to a year-on-year increase of 6.6%, or 8,200 apartments. Nevertheless, these numbers are much lower than they were before the major downturn that began in 2022. With the “Construction Turbo” passed in October, the German federal government now wants to significantly accelerate planning and approval processes. Industry representatives welcome this as an important step. “With this draft legislation, the federal government is addressing key obstacles to current construction practices. The planned facilitation is a necessary step toward greater speed, efficiency, and investment security – especially for serial prefabricated buildings,” HDH Managing Director Dr. Denny Ohnesorge explains. “This creates new market potential, both in new construction and renovation, for climate-friendly timber construction, which already accounts for around 80% of serial prefabricated construction projects.”
Wood as a central building block
The single-family home segment is stagnating: Around 90% of respondents to the Holzkurier’s economic survey do not expect any positive development in the medium term. Meanwhile, the segments renovations, extensions, and additions of stories are clearly gaining in importance. In the renovation segment, over 50% of companies rate the outlook as good or very good, and the same applies to the extensions and additions of stories segments. Timber construction is thus responding to changing market conditions and leverages its structural advantages in terms of flexibility, lightweight construction, and efficiency. Current challenges – low demand, high costs, limited planning security, and bureaucratic hurdles – do not change the long-term trend: Wood is going to become the leading construction method of climate-neutral architecture. This opens up new opportunities for timber construction companies, architects, and planners – from urban densification and modular extensions to the energy-efficient renovation of existing buildings. Timber construction is therefore not only part of a changing market, but also a central building block of future construction in Europe.
