The construction volume is expected to increase again in 2026. (Photo: Freepik, zinkevych)
Berlin – Despite a foreseeable trend reversal, the real construction volume will decline for the fifth year in a row in 2025. This is the conclusion German Institute for Economic Research (DIW). After that, the price-adjusted construction volume will grow by 2 percent in 2026. A decline of almost 4 percent is expected for 2024 and a decline of just under one percent for 2025.
High interest rates and construction costs
But even if, according to the DIW researchers’ calculations, the construction volume grows again next year, it will still be a good 7 percent below the peak value of 2021. In residential construction it will even be 10 percent. The decisive factor is the construction of new housing. Its volume is likely to be around 25 percent below the 2021 level in 2026.
The reasons for the crisis in construction are sharply rising interest rates and prices at higher costs. This made financing construction projects significantly more difficult in 2024. The number of orders and approvals collapsed. For the first time since the financial crisis, the nominal construction volume fell in 2024; after adjusting for prices, it has been falling year after year since 2021.
Construction volume: Soil formation is in sight
According to DIW study author Martin Gornig, there are signs that order numbers are bottoming out. Interest rates have also recently fallen slightly again. Since the economy will probably continue to weaken in 2025, an upswing is unlikely. Households in particular are likely to continue to hold back due to labor market concerns, especially in the first half of the year.
Source: www.pressetext.com
(pte013/08.01.2025/10:33)