In 2011, Germany‘s building construction sector was in the midst of an upswing in which the business volume rose 5.2% over the previous year, to € 207.4 billion. The results for 2012, though, are a lot weaker: Last year‘s growth rate amounted to a mere 0.9%, rising to a volume of € 209.3 billion.
In their current rising-structure forecast for the next few years, OC&C Strategy Consultants are prognosticating a steady, though restrained, positive trend across Germany‘s building construction sector. The analysis sees growth of 1.0% emerging for the year 2013. The suppressed market situation caused by the long winter has already been factored into the first quarter of 2013. The detected trend is expected to continue in the years to follow: Growth of 1.2% and 1.1%, respectively, is anticipated for 2014 and 2015. Indeed, OC&C sees mild expansion on the horizon for all building-construction subsegments, with the best outlook reserved for new residential construction. For the current year 2013, the main focus is on new multi-storey residential buildings. At 5.5%, that sector‘s growth rate will be comparatively high. In the non-residential construction sector, where growth has recently been negative, the next few years are expected to yield at least a little growth, primarily in the form of commercial construction. The renovation segment, which accounts for roughly two-thirds of the market‘s volume, is expected to continue growing slowly at its already high levels. For 2013, the study is assuming a renovation sector growth rate of 0.4% for residential construction and 0.7% for non-residential construction.
New residential construction: rising rents are driving the market
Residential construction is the foremost growth segment at the moment. This applies in particular to multi-storey residential construction. Rising rental and purchase prices, together with an ongoing urbanization trend, are shoring up the positive market situation, as reflected by the expanding number of building permits issued. Growth in this sector is pegged to average 2.5% between 2013 and 2015. The renovation volume is also expected to increase, though at a still-low level. Some of that gain can be attributed to energy-efficiency measures that are presently being promoted by the federal government via diverse incentive programs. Average growth in the private housing sector will presumably hover at a fairly weak 1.1% in the years to come.
Commercial construction buoying the non-residential sector
Growth in the entire non-residential construction sector is predicted to remain at or around 0.8% through 2015. Better results there are being prevented by continued weakness in public-sector construction. Considering the tightness of communal budgets and a variety of expiring government spending programs, public-sector clients have very little room in which to manoeuvre.