Germany Construction Market Size, Trend Analysis by Sector (Commercial, Industrial, Infrastructure, Energy and Utilities, Institutional and Residential) and Forecast, 2023-2027

Germany Construction Market Size, Trend Analysis by Sector (Commercial, Industrial, Infrastructure, Energy and Utilities, Institutional and Residential) and Forecast, 2023-2027

Summary

The construction industry in Germany is expected to shrink by 4.4% in real terms in 2023, reflecting the weak economic backdrop, with subdued investor and consumer confidence, high inflation, and rising interest rates. The drop in 2023 follows two successive years of decline in construction output, with contractions of 2.2% in 2022 and 1.4% in 2021. The residential sector is in a particularly weak position, with high construction costs and rising interest rates compounding the sector’s underlying weakness. According to the Federal Statistical Office (Destatis), the average construction cost index for residential buildings rose by 13.4% in 2022, owing to a rise in the prices of both materials and labor. The government is likely to miss its target of building 400,000 new apartments every year, even in 2023. According to the government’s estimates, only 295,300 apartments were built in Germany in 2022 - down from that of 293,539 units in 2021 and 306,400 units in 2020.

Assuming an improvement in the wider economy and an easing in the energy crisis, the German construction industry is expected to edge up marginally in 2024, by just 0.4%, before gaining some growth momentum from 2025 supported by investments in the transport, renewable energy, housing, and manufacturing sectors. Forecast-period growth in the industry will also be supported by investments to modernize and digitize the country’s railway network. In March 2023, the government announced that EUR45 billion ($47.8 billion) will be invested in the country’s rail system until 2027. Previously, in November 2022, the national railway company Deutsche Bahn (DB) announced a plan to overhaul the Hamburg-Berlin and Emmerich-Oberhausen railway corridors. Rehabilitation and expansion of the Emmerich-Oberhausen corridor will begin in November 2024 and end in June 2026, while work on the Hamburg-Berlin corridor will begin in June 2025 and end in December 2025

The report provides detailed market analysis, information and insights into the Germany’s construction industry, including -

• Germany’s construction industry's growth prospects by market, project type and construction activity
• Critical insight into the impact of industry trends and issues, as well as an analysis of key risks and opportunities in Germany’s construction industry
• Analysis of the mega-project pipeline, focusing on development stages and participants, in addition to listings of major projects in the pipeline

Scope

This report provides a comprehensive analysis of the construction industry in Germany. It provides -

• Historical (2018-2022) and forecast (2023-2027) valuations of the construction industry in Germany, featuring details of key growth drivers.
• Segmentation by sector (commercial, industrial, infrastructure, energy and utilities, institutional and residential) and by sub-sector
• Analysis of the mega-project pipeline, including breakdowns by development stage across all sectors, and projected spending on projects in the existing pipeline.
• Listings of major projects, in addition to details of leading contractors and consultants.

Reasons to Buy

• Identify and evaluate market opportunities using GlobalData's standardized valuation and forecasting methodologies.
• Assess market growth potential at a micro-level with over 600 time-series data forecasts.
• Understand the latest industry and market trends.
• Formulate and validate strategy using GlobalData's critical and actionable insight.
• Assess business risks, including cost, regulatory and competitive pressures.
• Evaluate competitive risk and success factors.