Revenue increases further in the construction industry

In 2018, there was a very high quantity of building permits and completions. This trend continues, but still doesn’t quite manage to meet the demand.

Whether it’s public, commercial or residential: The German construction industry grows further. (Image: Igor Starkov / Pexels.com)

Also in the new year, construction activity growth should continue at a high level. The construction industry can thereby expect a nominal increase in sales by six percent and a sales level of 128 billion euro.

This has been announced by the presidents of the Central Association of the German Construction industry (HDB), Dipl. Ing. Peter Hübner and the German Construction Confederation (ZDB), Dipl.-Ing. Reinhard Quast, on their mutual, annual press conference, which happened in mid-December in Berlin. According to the press release, growth happened in almost every segment with public, commercial and residential construction among them.

Growth and stagnation for the construction of flats and homesteads

“In regards to the construction of flats, we’re suspecting 6.5 percent for the nominal growth in turnover for the ongoing year. For 2019, we’re expecting a further growth of 5.5 percent. With that, about 300,000 flats have been created in 2018. In the new year, we’re banking on 315,000 up to 320,000 units”, both presidents explain. But while doing so, they also note that this still doesn’t meet the high demand of at least 350,000 flats. Also, growth in this sector only relates to the lucrative business with multi-story residential buildings. On the contrary, new constructions of private residences stagnate on the level of the year 2017.

Almost unchanged should be the growth in the commercial construction sector. Here, the rate of change on a percentage basis between 2017 and 2018 amounts to seven percent, while a slight decline to six percent is expected for 2019. This decline however shouldn’t have any effect on the German construction industry, claim Hübner and Quast. This would only be the case “if German industrial companies reduced their domestic investments – among them the ones in construction – due to worse sales expectations abroad”. A development that is, according to recent investment polls, not exactly proven.

Positive prospects for public construction

A continuous growth however is seen in the public construction sector, which can be traced back to beneficial side conditions. Here, a growth of five percent is expected between 2017 and 2018, as well as a slight increase to six percent in the new year of 2019. Federation, federal states and municipalities should have increased their investments in the recent years noticeably, with the first one especially having increased its investments or investment grants from 10.3 to 13.3 billion euro. This has been beneficial for federal high-, rail- and waterways, as well as combined transport.

There’s a general optimism on the construction market, where the number of employees increased by 20,000 or 2.5 percent to 832,000 on average. In regards to the lowest value of the year 2009, where 705,000 workers have been occupied, this should mark an increase by 20 percent. Furthermore, Hübner and Quast expect a growth by two percent to 850,000 employees.

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