Germany's construction sector has emerged from years of stagnation with a cautious sense of optimism as it looks towards the upcoming year. Wolfgang Schubert-Raab, the president of the ZDB representing Germany's construction industry, emphasized this sentiment during a Friday event in Berlin. He pointed out that the low point of the crisis has been reached, particularly in the residential construction segment.

Germany's Construction Industry - A Tale of Stagnation and Recovery

Residential Construction: The Low Point Reached

Companies within the construction industry now believe that the situation is better than it was a year ago. Back then, a significant 70% expressed negative expectations for the coming months. However, that figure has now dropped to just under 50%. The number of approved apartments has seemingly "bottomed out" and currently stands at 17,000 per month. This indicates a glimmer of hope in the residential construction sector.There is a growing sense among companies that they are no longer overly focused on the depths of the crisis. Instead, they are gradually orienting themselves along the bottom of the valley, suggesting a more stable outlook.

Industry Weakness and Its Impact on Building Construction

Building construction is facing challenges due to the overall weakness of the industry. When the automotive industry is stuck in a structural crisis and major industrial companies like Thyssen, Bosch, and VW are cutting back on capacity, it creates a ripple effect on construction projects. For instance, if the Intel plant near Magdeburg fails to get off the ground, it directly affects the construction landscape. This highlights the interdependence between different sectors and the need for a coordinated approach.On the other hand, civil engineering, which mainly involves infrastructure projects, is reaping the benefits of the energy and mobility transition. The construction of new power lines and railway lines, for example, is maintaining demand in this sector. It shows that while some areas of the construction industry are facing difficulties, others are finding opportunities in the changing landscape.

The Call for a "New Start in Construction"

In light of the decline in the number of building permits, high interest rates, and the need for infrastructure renovation, Schubert-Raab has urged the new German government to take immediate action. The ZDB's demands include streamlining state building regulations to make the process more efficient. Additionally, a halt to the tightening of energy standards is crucial to support the construction industry. These measures are seen as essential for kick-starting a new phase of growth and stability in the construction sector.Overall, Germany's construction industry is at a crossroads. While it has overcome the worst of the crisis, it still faces various challenges. By addressing the key issues and implementing the necessary reforms, the industry has the potential to thrive in the years to come.