Digital demand boosts infrastructure investment
Germany’s economy remains very sound, with GDP growing 2.2 percent in 2017. With Brexit looming, demand for office and residential space is heating up. Meanwhile, fast-rising house prices in major cities, with no let-up expected, is pushing construction capacity towards critical.
Shortages of homes and offices plus the government’s strategy to improve internet connectivity are expected to be the main drivers of construction. Residential is likely to hold its leading share of construction. It is forecast to account for 47.7 percent in 2021.
On the infrastructure side, there is a USD112bn public/private project to transform the digital economy by building a crosscountry internet network. Other major schemes include the USD1.8bn Merkur offshore wind farm in the German North Sea which will cater for 500,000 households.
|Market:||Staying the same|
|Cost escalation 2017–18:||3.2%|
|Cost escalation 2018–19:||3.0%|
|Location factor (USD):||82.3|
Business activity and confidence is high in Germany. Central and local government tax revenues have improved, which is likely to result in increased government investment in infrastructure, education and health in the future. But there is always the possibility that the recent diesel scandal, Brexit or unpredictable election results could dent confidence. Immigration from within and outside Europe is expected to sustain residential building.
This content is part of the International construction market survey 2018