Germany market intelligence: embracing opportunities in an uncertain future
Germany's construction market faces ongoing uncertainty, which is unlikely to resolve soon. This Q1 2025 edition of the Germany market intelligence report identifies changing market conditions while underscoring the importance of adaptability and strategic planning in a market affected by changing geopolitics.
Recession concerns continue
Economic forecasts for Germany in 2025 remain weak, with only minimal growth anticipated. Germany stands out as the sole G7 nation whose economy has contracted over the past two years, and the likelihood of a third, consecutive year of decline looms.
Construction orders are declining, construction prices rising
With Germany situated squarely within a recession, the issuing of building construction permits has been in a sharp decline since 2022. Construction prices, however, have still seen some slight increases.
With the investment expected in defence, infrastructure and climate protection, construction may see some rebound in the future.
Tender price inflation forecast
Our central scenario remains consistent with our previous report, predicting a modest rise in construction tender prices in 2025, followed by a slight rebound in the subsequent years.
Given the potential for stagnation and deflation in 2025, clients and contractors must proactively address cost pressures by customising their strategies based on a number of factors: region, sector, project size and procurement routes.
