Germany's construction sector expects infrastructure fund to fuel turnaround

By Christian Kraemer and Maria ⁠Martinez

BERLIN, Dec 11 (Reuters) - ⁠Germany's ‍construction sector, mired in crisis for years, is on the verge of a revival, the country's main construction trade body said on ‍Thursday, as the government pumps hundreds of billions of euros into ​a massive infrastructure renewal plan.

The Central Association of the German Construction Industry (ZDB) forecasts a slight real ​increase in sector turnover of 0.6% this year, reversing three years of decline, followed by a 2.5% surge in 2026.

Revenues are forecast to reach 168 billion euros ($196.61 billion) in 2025, ​up 3% in nominal terms from the previous year, and 178 billion euros in 2026.

INFRASTRUCTURE FUND TO BOOST CONSTRUCTION SECTOR

"The construction industry has passed the ​lowest point," ZDB president Wolfgang Schubert-Raab said, pointing to special funds from a 500‑billion‑euro package to modernise infrastructure ‌as the main driver. "After years of declining figures, confidence is returning to the construction industry for the first time."

State investment will ​primarily fuel growth in civil engineering, the association ⁠said, though conditions are also improving in residential construction.

In a ZDB survey of 1,500 construction firms, 56% described their current business ‌situation as good or satisfactory. Nearly 70% expect a stable or better situation in the coming months, compared with just over half a year earlier.

RESIDENTIAL SECTOR EXPECTED TO GROW ‌FROM 2026

In residential building, the ZDB expects turnover of just under 54 billion euros in 2025, ‌a real decline of 4% after inflation compared to the previous year. In 2026, however, revenues are due to rise to 56.3 billion euros, a real increase of 1.6%.

The association ‍expects between 225,000 and 230,000 housing units to be completed in 2025, down from 252,000 in 2024, and falling further ⁠to between 215,000 and 220,000 units next year.

New building permits dropped 27% in 2023 and a further 17% in 2024.

"Due to the long lead times, we do not expect positive figures until 2027," ZDB said.

($1 = 0.8545 euros)

(Reporting by Christian Kraemer; Writing by Maria Martinez; Editing by Joe Bavier)

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