The German construction industry lowered its revenue forecast for 2026: now the German Construction Industry Federation expects real growth of 1% instead of the previously forecast 2.5%.
The industry organization explained that the revision is due to the weak dynamics in construction in the first months of the year and the continued increase in the cost of work. The housing segment will be most noticeably affected by the deterioration: if in January the association expected growth of 2%, now it forecasts only 0.5%.
Tim-Oliver Muller, Managing Director of the federation, said that the industry has not yet seen steady signs of a turn for the better.
"The fact that we did not go into negative territory is primarily due to the June figures, when orders increased and turnover increased slightly. But it is still unclear whether this is the beginning of a sustained recovery or just a short—term surge," he said.
The federation refers to a recent survey of member companies, according to which only 30% of respondents expect revenue growth this year. The same number predict a recession. In addition, three quarters of the survey participants reported that they could not cope with further increases in prices for materials and energy.
The Association also points to data from the federal statistical Office, according to which in June the volume of orders in construction increased by 11.3% year-on-year and by 6% compared to May. The organization believes that this may be a signal of an improvement in the situation in the new year.
ING Bank previously published a forecast according to which construction in Germany could grow by 2% in 2027. Although this pace looks moderate, it may mean the end of a period of recession and stagnation. For comparison, in Europe as a whole, the volume of construction has increased by an average of 1.75% per year over the past five years, while in Germany the sector has declined by more than 10% over the years 2020-2025.