Construction in Germany - Key Trends and Opportunities to 2019

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Dec 21, 2015, 05:50 ET

LONDON, Dec. 21, 2015 /PRNewswire/ -- Synopsis
Construction activity in Germany recovered in 2014, due to an improving business environment, low unemployment, economic expansion, low interest rates, and government expenditure on improving public infrastructure. The country's construction industry consequently grew by 2.6% in real terms in that year.

In real terms, Germany's construction industry will continue to expand over the forecast period (2015–2019), with investment in transport infrastructure, residential and renewable energy projects continuing to drive growth.

The industry's output value in real terms is forecast to rise at a compound annual growth rate (CAGR) of 2.28% over the forecast period, up from 0.97% during the review period (2010–2014).

Summary
Timetric's Construction in Germany – Key Trends and Opportunities to 2019 report provides detailed market analysis, information and insights into the German construction industry including:

- The German construction industry's growth prospects by market, project type and type of construction activity

- Analysis of equipment, material and service costs across each project type within Germany

- Critical insight into the impact of industry trends and issues, and the risks and opportunities they present to participants in the German construction industry

- Analyzing the profiles of the leading operators in the German construction industry.

- Data highlights of the largest construction projects in Germany

Scope
This report provides a comprehensive analysis of the construction industry in Germany. It provides:

- Historical (2010-2014) and forecast (2015-2019) valuations of the construction industry in Germany using construction output and value-add methods

- Segmentation by sector (commercial, industrial, infrastructure, energy and utilities, institutional and residential) and by project type

- Breakdown of values within each project type, by type of activity (new construction, repair and maintenance, refurbishment and demolition) and by type of cost (materials, equipment and services)

- Analysis of key construction industry issues, including regulation, cost management, funding and pricing

- Detailed profiles of the leading construction companies in Germany

Reasons To Buy
- Identify and evaluate market opportunities using Timetric's standardized valuation and forecasting methodologies

- Assess market growth potential at a micro-level with over 600 time-series data forecasts

- Understand the latest industry and market trends

- Formulate and validate business strategies using Timetric's critical and actionable insight

- Assess business risks, including cost, regulatory and competitive pressures

- Evaluate competitive risk and success factors

Key Highlights
- According to Destatis, the country's gross fixed capital formation in construction grew by 5.2%, from EUR277.2 billion (US$367.5 billion) in 2013 to EUR291.8 billion (US$393.6 billion) in 2014. This was preceded by respective annual growth of 3.3% and 1.6% in 2012, and 2013. Moreover, the country's gross fixed capital formation in construction grew by 1.4% in January–June 2015, compared to January–June 2014, reaching EUR143.4 billion (US$196.0 billion).

- To maintain and develop the country's mainline rail network, German Rail (DB) plans to spend EUR28.0 billion (US$37.8 billion) on rail infrastructure during 2015–2019. A contribution of EUR20.0 billion (US$27.0 billion) will be made by the federal government under the Performance and Financing Agreement 2 (LuFV2), and the remaining EUR8.0 billion (US$10.8 billion) will be contributed by DB.

- According to Destatis, residential property prices increased during the first half of 2015, backed by growth in demand due to low unemployment, rising business confidence and low interest rates. The country's housing price index grew by 4.5%, from 112.6 in January–June 2014 to 117.7 in January–June 2015. During the same period, the price index for purchases of new dwellings grew by 6.0%, from 111.8 to 118.4, and the price index for purchases of existing dwellings grew by 4.3%, from 112.8 to 117.6.

- Germany is facing a housing shortage in line with its growing urbanization and high levels of immigration. According to Destatis, net migration grew by 28.4%, from 428,607 in 2013 to 550,483 in 2014. This was preceded by annual growth of 16.2% and 32.1% in 2013 and 2012 respectively. Despite the construction of a large number of housing units, supply is relatively low compared to demand, providing opportunities for residential developers. According to the government estimate, about 350,000 apartments are needed every year to address the country's housing deficit, but only 245,000 apartments were constructed in 2014.

- Infrastructure construction is expected to continue to expand over the forecast period, driven by investments in road and rail construction. To connect the fixed link across the Fehmarn belt, to cut travel times and improve transport services by 2021, the Ringsted-Fehmarn rail link project is being developed to connect Germany to Denmark. The project will provide a link between the Puttgarden on Fehmarn Island and Rødbyhavn on Lolland, and reduce travel time from four hours and 30 minutes to two hours.
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