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The Germany construction market size is estimated to grow at a CAGR of 6.05% between 2022 and 2027. The market size is forecast to increase by USD 130.65 billion. The growth of the market depends on several factors, including the growing demand for housing units, increase in public infrastructure spending by the government and rising regulatory efforts to increase consumer spending on housing.
This construction market report extensively covers market segmentation by Type (buildings construction, heavy and civil engineering construction, land planning and development, and specialty trade contractors), and End-user (residential, commercial, and public). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.
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The growing demand for housing units is notably driving the market growth, although rise in cost of construction may impede the market growth. Our researchers analyzed the data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
Growing demand for housing units is a key market driver. Demand for residential units in the German construction market has steadily increased in recent years due to various factors. One of the main drivers of increased demand for housing in Germany is population growth. Despite its relatively low birth rate, Germany has one of the highest concentrations of immigrants in Europe. This increased the population, which, in turn, increased the demand for housing. Another factor driving housing demand in Germany is urbanization. Demand for urban housing is increasing as more people migrate to cities in search of jobs and better opportunities. This has led to an increase in the construction of apartments and skyscrapers in major cities such as Berlin, Munich, and Frankfurt. In addition, historically, low interest rates have made it easier for people to obtain mortgages and buy homes, further increasing demand for housing. In addition, the federal government has implemented policies to encourage homeownership, such as first-time buyer subsidies, which have contributed to an increase in housing demand. Overall, the demand for residential units in the German construction market is likely to continue increasing in the coming years due to population growth, urbanization, low interest rates and government policies.
Growing demand for modular houses is a key trend prevailing in the market. Germany was an early adopter of automation and digitization. This country was the first to coin the term Industry 4.0. Germany plans to increase the use of digital technologies in the construction industry as part of the increasing digitization of various industries. One of the fastest growing technologies is Building Information Modeling (BIM). This technology is a 3D modeling tool that provides digital /images of real buildings and their assets.
BIM implementation in construction projects has improved supplier productivity, quality, and speed of work. In April 2013, the Federal Department of Transport and Digital Infrastructure established the Major Project Construction Reform Commission to increase public confidence in specific projects. The Reform Commission was formed to develop solutions to improve cost-effective pricing, increase cost transparency, increase efficiency and facilitate on-time completion of major projects.
The rise in cost of construction is hindering market growth. The construction industry utilizes various inputs such as raw materials, land, labor and utilities during the construction process. Prices for raw materials such as metal, wood and concrete are rising in Germany. This is having a negative impact on the provider's profit margins.
Rising labor costs have also increased operating costs for the German construction industry. German trade unions and employers agreed in November 2022 to raise wages for more than 3.8 million construction workers by 8.0% from a year earlier. According to the agreement, construction workers in Western Germany are entitled to an increase of 5.5%. The seller can pass on the increased cost to the buyer. However, such high prices are not sustainable in the long term, especially for the housing market. Germany has one of the highest housing costs and rents in Europe. Those costs have increased since her 2009. The mismatch between demand and supply in the residential real estate sector suggests that these prices will continue to rise during the forecast period. Against this backdrop, housing demand will decline as sellers pass on higher utility costs to buyers. It can also adversely affect the profit margins of vendors in the market.
The market report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Global Construction Market Customer Landscape
Vendors are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Bauer : The company offers construction services such as bored piles and anchors.
The research report also includes detailed analyses of the competitive landscape of the market and information about 15 market vendors, including:
Qualitative and quantitative analysis of vendors has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize vendors as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak.
Building construction is an important segment of the German construction market and contributes significantly to the national economy. Building construction projects have increased in recent years due to the growing demand for housing and infrastructure in the country.
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The building and construction segment was valued at USD 119.70 billion in 2017 and continued to grow by 2021. Domestic and foreign construction companies compete for orders in the highly competitive German construction market. Additionally, the market is highly regulated, with strict building codes and regulations to ensure good building standards and safety for all. This will drive the growth of the market we focus on during the forecast period.
The construction market report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027.
Technavio categorizes the Germany Construction Market as a part of the Industrial market within the global capital goods market. The parent global application software market covers companies that are engaged in developing and producing application and system software. It also includes companies offering database management software. Our market research report has extensively covered external factors influencing the parent market growth during the forecast period.
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Germany Construction Market Scope |
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Report Coverage |
Details |
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Page number |
131 |
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Base year |
2022 |
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Historic period |
2017-2021 |
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Forecast period |
2023-2027 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 6.05% |
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Market growth 2023-2027 |
USD 130.65 billion |
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Market structure |
Fragmented |
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YoY growth 2022-2023(%) |
5.62 |
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Competitive landscape |
Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks |
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Key companies profiled |
allkaufhaus GmbH, ARGON Hausbau GmbH and Co. KG, BASF SE, BAUER AG, Bilfinger SE, Building Radar GmbH, CRH Plc, GOLDBECK GmbH, HOCHTIEF AG, Lechner Massivhaus GmbH, LEONHARD WEISS GmbH and Co. KG, Max Bogl Bauservice GmbH and Co. KG, PERI SE, PORR AG, Ronesans Holding, RRI GmbH Rhein Ruhr International, SchworerHaus KG, STRABAG SE, TRAPP Construction International GmbH, and WOLFF and MULLER Holding GmbH and Co. KG |
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Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID 19 impact and recovery analysis and future consumer dynamics, Market condition analysis for forecast period |
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Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this market research report to meet your requirements.
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Type
7 Market Segmentation by End-user
8 Customer Landscape
9 Drivers, Challenges, and Trends
10 Vendor Landscape
11 Vendor Analysis
12 Appendix
Research Framework
Technavio presents a detailed picture of the market by way of study, synthesis, and summation of data from multiple sources. The analysts have presented the various facets of the market with a particular focus on identifying the key industry influencers. The data thus presented is comprehensive, reliable, and the result of extensive research, both primary and secondary.
INFORMATION SOURCES
Primary sources
Secondary sources
DATA ANALYSIS
Data Synthesis
Data Validation
REPORT WRITING
Qualitative
Quantitative
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