According to the Q4 2021 Global Construction Survey, the construction industry in Germany is expected to grow by 11.1% to reach EUR 261,240 million in 2022.

Despite near-term challenges in certain construction sectors, medium to long term growth story in Germany remains intact. The construction industry in Germany is expected to grow steadily over the next four quarters. The growth momentum is expected to continue over the forecast period, recording a CAGR of 6.3% during 2022-2026. The construction output in the country is expected to reach EUR 333,922.1 million by 2026.

Government-backed affordable housing programs to boost the construction sector growth in Germany

The German government has set affordable housing as one of the major objectives for the country. The government is planning to build 400,000 new housing units every year, of which 100,000 are to be publicly subsidized. This is more than 50,000 units compared to the current goal and nearly 100,000 more than what the construction industry has managed to build as of November 2021.

Moreover, the government has increased the affordable housing subsidies substantially. For ensuring that the new affordable housing goals are met, the government has formed a new ministry to oversee the development in the sector.

Based on the migration trends in the country, Germany is expected to need at least 400,000 new housing units every year for the next decade or longer. The publisher expects the greater emphasis of the new government on affordable housing and the need for new housing units because of increasing migration to keep supporting the industry growth from the short to medium-term perspective in the country. Consequently, maintain a positive outlook for the residential construction sector in Germany over the next four to eight quarters.

Infrastructure construction projects are expected to support industry growth in the near term

n Germany, construction activities of several infrastructure projects have begun during Q3 2021. Some of the notable infrastructure projects which have started construction activities include the Berlin Data Center Campus, Digital Park Fechenheim, Kieler Forde Shipbuilding Facility Development, and Lorrach Central Hospital Campus Development.

Moreover, the Berlin Data Center Campus, located in Brandenburg Park, will be consisting of two 16MW buildings. The first phase of the construction project is expected to be completed in early 2022 and will also include 8MW of IT capacity. The publisher expects these infrastructure construction projects to keep supporting the growth of the overall industry from the short to medium-term perspective in the country.