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The Germany construction market size is forecast to increase by USD 130.65 billion at a CAGR of 6.05% between 2022 and 2027. Market growth hinges on multiple factors, notably the surging demand for housing units driven by population growth and urbanization trends. Additionally, government initiatives to boost public infrastructure spending further fuel market expansion, stimulating building activities. Moreover, regulatory efforts aimed at enhancing consumer spending on housing, such as tax incentives and subsidies, play a crucial role in driving market growth. These measures incentivize individuals and businesses to invest in real estate, thereby bolstering market demand. Consequently, the synergy between increasing housing demand, government infrastructure investments, and regulatory support creates a conducive environment for sustained market growth. As urbanization continues and regulatory frameworks evolve, the housing market is poised for significant expansion, driven by these key factors.
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The market is experiencing steady growth, driven by various factors such as hotels, green energy, and transport infrastructure projects. These initiatives span different development stages, involving numerous participants and contributing to major projects. Key sectors like commercial construction and leisure and hospitality buildings are witnessing significant activity alongside office buildings, retail buildings, and warehouses. Additionally, outdoor leisure facilities and other commercial construction are gaining traction, fueled by the resurgence of tourism and travel business activities. Moreover, residential building activities and commercial building activities are on the rise, reflecting the robust momentum in the market.
Further, this 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 market forecast report includes historic market data from 2017 to 2021.
The buildings construction segment will account for a major share of the market's growth during the forecast period. Building structure is an important segment of the market and contributes significantly to the national economy. Building structure projects have increased in recent years due to the growing demand for housing and infrastructure in the country.
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The buildings construction segment was valued at USD 119.70 billion in 2017. Domestic and foreign construction companies compete for orders in the highly competitive 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 market is witnessing robust drivers fueled by various factors such as hotels, green energy, and transport infrastructure projects. Across different development stages, numerous participants contribute to this sector's vitality. Key sectors like commercial construction and leisure and hospitality buildings are experiencing significant expansion, along with office buildings and retail buildings. Moreover, the demand for warehouses, data centers, and industrial parks is escalating due to industrialization and growth in population. Rapid urbanization in developing regions is prompting substantial government investments in infrastructure projects, further propelling the growth trajectory of construction activities. 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 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.
Additionally, historically, low interest rates have made it easier for people to obtain mortgages and buy homes, further increasing the 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 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 building 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.
Moreover, 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 building industry utilizes various inputs such as raw materials, land, labor, and utilities during the building 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.
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 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 companies 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 market forecasting report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Market Customer Landscape
Companies 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.
The research report also includes detailed analyses of the competitive landscape of the market and information about 20 market companies, including:
Qualitative and quantitative analysis of companies 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 companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The market report forecasts market growth by revenue and provides an analysis of the latest trends and growth opportunities from 2017 to 2027.
The market is experiencing robust growth, fueled by various growth drivers such as industrial construction in sectors like chemical and pharmaceutical plants, manufacturing plants, and waste processing plants. Infrastructure construction, including rail and road infrastructure, is also thriving alongside renewable energy projects driving energy independence. Institutional construction for educational buildings, healthcare, and research facilities, as well as residential construction for single and multi-family housing, is on the rise. Government initiatives addressing housing deficits further stimulate market expansion. Technological advancements like drones, 3D printing, and smart infrastructure are reshaping the industry, enhancing performance optimization and sustainability measures. With increasing government spending and a focus on urban development, the market presents significant revenue possibilities and investment opportunities.
Further, the market encompasses diverse sectors like metal and material production, rail infrastructure, energy and utilities building including electricity and power, oil and gas, telecommunications, and water infrastructure. It also involves the construction of various educational, healthcare buildings, institutional buildings, and religious buildings. Addressing the housing deficit remains a priority, with a focus on single and multi-family housing. Historical and forecast valuations, project pipeline, and market opportunities guide industry stakeholders. Advancements in construction technology drive construction market demand, especially in urban areas. Accessibility to financing and new housing projects are crucial for economic growth and job creation. Eco-friendly and sustainable construction practices are increasingly emphasized to address environmental concerns while meeting economic development goals.
Further, the market encompasses a wide array of activities, including the development of production and processing plants and various public projects such as bridges, airports, and dams. It plays a vital role in supporting health, education, and research projects, along with addressing housing needs through affordable housing programs. Consultants and leading contractors provide critical insight and expertise, navigating through regulatory and competitive pressures. Innovative technologies drive structure techniques, ensuring eco-friendly and efficient project delivery. Mapping and surveying assist in the design and assembling phases, while solar and wind farms represent the industry's commitment to renewable energy. With the world's population growing, the market remains pivotal in shaping improved infrastructure and communication networks to meet evolving needs.
Market Scope |
|
Report Coverage |
Details |
Page number |
131 |
Base year |
2022 |
Historic period |
2017-2021 |
Forecast period |
2023-2027 |
Growth momentum & CAGR |
Accelerate at a CAGR of 6.05% |
Market growth 2023-2027 |
USD 130.65 billion |
Market structure |
Fragmented |
YoY growth 2022-2023(%) |
5.62 |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
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 |
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 the forecast period. |
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
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