Germany’s Construction Industry Warns Recovery Still Out of Reach as Costs Rise

Germany’s construction sector has warned that its long-running downturn is far from over, as rising energy and raw material costs continue to weigh on businesses. Industry leaders say a hoped-for recovery has been weakened by a new wave of price increases linked to geopolitical tensions in the Middle East.

Marcus Nachbauer, chairman of Germany’s main construction association, said the temporary closure of the Strait of Hormuz has driven up the cost of essential materials, including bitumen, concrete, cement, plastics, diesel, and heating oil. A recent survey found that around 80% of construction companies reported higher prices for bitumen and plastics, adding further pressure to an already struggling sector.

The association reported that member companies generated approximately €432 billion in revenue in 2025, with growth largely driven by higher prices rather than increased construction activity. Looking ahead, the sector expects revenue to remain unchanged in 2026 and is calling for faster planning approvals, reliable housing subsidies, and greater infrastructure investment to support growth and improve market conditions.

Pic courtesy: google/ images are subject to copyright