German construction kept flourishing in 2020, little harmed by the Covid-19 pandemic, Kallanish learns from industry federation Hauptverband der Deutschen Bauindustrie. For the current year, expectations are more modest altogether, partly due to higher costs, which also includes higher steel prices.
German construction companies in 2020 generated a collective turnover of €143 billion ($170 billion), 6% more than in 2019, also due to lower price increases for material prices.
Residential construction performed best in 2020 as a whole, with a nominal increase in turnover of 10.5%. By contrast, commercial construction could not escape the uncertainty of investors; turnover here was only 1.2% above the previous year’s level. In public construction, revenue increased by 6.2%. In order to cope with the additional production, the companies increased their workforce by 22,500 or 2.6% to 893,000 employees on average.
“For this year, we are only assuming a nominal stagnation in turnover, but in real terms a decline in turnover of 2%. We cannot completely free ourselves from the Covid-19 crisis,” says Tim Lorenz, vice president economy of the federation. “After all, our sector is lagging behind the overall economic development. Commercial building construction in particular is already affected by declining investments in industry and the service sectors.” This is already visible in the weaker development of orders, he adds.
Into 2021, the additional discrepancy between market demand and rising prices for building materials has increased drastically. This is reflected in the stronger increase in construction prices. These are due to the VAT standard rate, which was reduced in 2020, and also due to the prices of building materials such as steel or bitumen, Lenz notes.
Christian Koehl Germany
