German construction industry outlook worsens: study

GERMANY’S construction industry is expected to shrink by 4 per cent this year, slightly worse than the earlier projection of 3.5 per cent, leading to around 10,000 job losses, a study by the German Construction Industry Federation (HDB) said on Tuesday (Jun 4).

The sector is being dragged down by weakness in residential construction, with sales expected to shrivel by 12 per cent in real terms, while public construction works will also perform worse than expected, the study found.

It adds to a broadly bleak outlook for construction in Europe’s largest economy, which has been hobbled by rising interest rates, higher inflation and economic stagnation.

“Another figure is particularly painful: in the employment forecast, we expect a reduction of 10,000 employees,” HDB president Peter Huebner said, adding: “There can only be one solution: build, build, build.”

According to the study, the only growth area will be commercial construction, with an increase in sales of 1.5 per cent. The reason for this is major orders from Deutsche Bahn, electricity network operators and local transport.