German construction sector remains upbeat for 2020

Germany’s construction industry is expecting revenues to rise in 2020, Kallanish hears from the main industry associations Hauptverband der Deutschen Bauindustrie and Zentralverband Deutsches Baugewerbe.

Revenues are anticipated to grow by 8.5% to €137 billion ($145 billion), following an estimated increase of 11% in 2019. Given that prices increased by 5.5% last year, the adjusted, or real, growth in revenue was 3%.

At a joint press conference in Berlin, the associations said that residential construction is likely to maintain a level of around 300,000 new apartments this year. For commercial construction, they predict varied development. While (building) permits for factory and workshop buildings have been declining for three months, permits for warehouse and commercial buildings as well as office and administration buildings are showing an upward trend.

In commercial civil engineering, monthly incoming orders have remained steady year-to-date showing a year-on-year increase of 10% since the end of the first quarter of 2019. “We attribute this above all to the investments for railway lines, bridge and tunnel construction by Deutsche Bahn. The federal budget provides for a further increase in investment grants of €1.1 billion to €6.6 billion (+18%) for the coming year,” the representatives say (see separate article).
This is one of the reasons why the associations representing the commercial construction segment are forecasting total revenues of approx. €51 billion for 2020. This would mean an on-year increase of 5.5%.