Germany's construction sector has not yet recovered from its downturn, facing renewed price shocks from geopolitical events impacting energy and raw materials, according to the head of its main industry association. The sector is urging faster planning, approval procedures, and investment to stimulate activity.
The German construction sector's prolonged downturn and the impact of geopolitical price shocks highlight broader economic challenges in Europe's largest economy. Policy changes are needed to stimulate investment and activity in a sector crucial for economic growth.
Germany's construction sector is still grappling with a downturn, with recent geopolitical events exacerbating price pressures on energy and raw materials, according to Marcus Nachbauer, chairman of the Bundesvereinigung Bauwirtschaft. He noted that bitumen, concrete, cement, plastics, diesel, and heating oil have become significantly more expensive in recent weeks, with around 80% of member companies reporting higher prices for bitumen and plastics.
Nachbauer stated that the sector's revenue in 2025 reached approximately €432 billion ($500 billion), a nominal increase of 0.8%, primarily driven by price effects rather than increased construction volumes. The association anticipates 2026 revenue to remain at the previous year's level, with higher prices continuing to offset weaker construction activity.
To help lift Germany out of economic stagnation, Nachbauer urged for faster planning and approval procedures, reliable housing subsidies, and increased infrastructure investment reaching municipalities, emphasizing that "Building is economic policy."
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