Germany, in its role as a leading economy in the EU, also possesses one of the most active, robust construction industries on the continent. It’s responsible for approximately 6% of the nation's gross domestic product (GDP) in 2021. Despite grappling with the challenges posed by the COVID-19 pandemic, among which are surging inflation rates, the industry has demonstrated remarkable resilience given its consistent growth over the past few years. The outbreak of the pandemic in 2020 and subsequent economic hardships failed to impede the upward trajectory of the German construction sector. While the growth in the value of the industry was modest in 2021, 2022 witnessed a noteworthy surge in revenue.
The German construction industry stands on three pivotal segments. Building construction, encompassing both residential and non-residential structures, witnessed the creation of nearly 32 million square meters of useful floor space in 2022. Non-residential buildings took precedence in this dynamic landscape. Civil engineering, focusing on public infrastructure projects, highlighted roads and motorways as the highest turnover contributors. The third facet involves specialized construction activities, spanning HVAC installations, demolition, and elevator installations.
Raw materials form the lifeblood of construction, and in 2021, concrete products and cement reigned supreme among the materials with the highest turnover. However, the industry has had severe issues with material shortages caused by disrupted supply chains owing to the complications of the pandemic and the war in Ukraine. Even in May 2022, over 50% of German construction companies reported grappling with material scarcity. The specter of inflation further exacerbated the situation, escalating labor and construction material costs. However, the outlook remains good for the years ahead. Notable players have been navigating this tricky landscape. Experts expect that the German construction industry will be able to strategically position itself for a resilient future.