Germany Prefabricated Buildings Market - Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)

Germany Prefabricated Buildings Market - Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)

The German Prefabricated Building Market is expected to record a CAGR of approximately 4% during the forecast period 2022-2027.

The COVID-19 pandemic has caused immense disruptions in construction works across Germany. With the fall in building and construction operations, the need for prefabricated building systems has fallen significantly, which has had a major impact on the market growth. Several construction companies shut down their projects due to lockdown and restrictions. Since a high workforce is required for traditional construction, opting for prefabricated buildings came out as an optimum solution during the pandemic. Due to the lockdown in the country, prefabricated manufacturing companies have faced a range of challenges owing to the shortage of raw materials and labor. The revenue of the prefabricated building market decreased drastically in 2020 due to covid 19. A slow recovery was seen in 2021 after the relaxation of lockdown norms.

Prefabricated housing is gaining popularity across the European region due to the population growth and shortages in housing. It is gaining momentum as an effective means to build affordable housing. Prefabricated housing demand is on the rise, as the building technique's advantages are increasingly being leveraged by new home buyers in an improving economic and demographically charged marketplace. The adoption of additive manufacturing in Europe is expected to significantly boost the prefabricated construction sector in Germany. Companies are embracing environment-friendly products and production practices to set themselves apart from the competition. The introduction of energy-absorbing materials such as micro dwellings has resulted from the focus on energy efficiency.

The rising awareness of construction wastage and its impact on the environment is encouraging the adoption of prefabricated buildings. Various interior and exterior architectural styles that cannot be realized in a house built on-site can be easily deployed in a prefabricated house. Technological progress and manufacturers' focus on providing customers with high-quality services can further promote the growth of the German prefabricated building market during the forecast period.

Germany Prefabricated Buildings Market TrendsIncreasing Labor Cost

Construction required all types of labor, including full-skilled, semiskilled, and low-skilled. The requirement for semiskilled and low-skilled labor is more as compared with full-skilled labor in construction activity. In Germany availability of unskilled and semiskilled labor is declining very rapidly. The Head of the Federal Employment Agency of Germany said that Germany requires 400,000 new immigrant laborers per year to fulfill the country's labor need. There is government regulation for paying minimum wages to the labor. The Federal Ministry has set the rules for Labour and Social Affairs for minimum wages of labor. There is around a 15.8% hike in the Minimum Wages Set (Gross per hour) from 2015 to 2021. This increased labor cost resulted in the high construction cost of building. As prefabricated buildings are manufactured in advance in other locations and can be transported and assembled. It is shifting the focus of consumers toward it over the conventionally constructed building and driving the growth of the prefabricated building market

Growing Demand for Precast Concrete

Precast concrete is generally used in both commercial and residential prefabricated buildings. Due to its high strength and low cost compared with other materials like glass, metal, and timber, precast concrete is gaining huge popularity and adoption in building construction. In 2021 concrete segment acquired a major share of Germany's prefabricated buildings market. In Germany, very few trained people are currently available in the private sector to implement the precast concrete system. The service provided is more focused on the various other market-building methods and techniques available.

Germany Prefabricated Buildings Market Competitive Analysis

The German Prefabricated Buildings market is highly competitive, with a few players occupying the major share. Prefabricated building systems and construction hold high potential to improve the efficiency and performance of the German construction industry in a more sustainable sense. Some of the top names in this industry includes ALHO Systembau GmbH, Romakowski GmbH & Co. KG, MCE GmbH Niederlassung Rhein-Main, Deutsche Fertighaus Holding and Fertighaus Weiss GmbH.

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