Stabilisation of the housing demand at a low level

The German construction industry has endured the most dramatic post-war decline in demand. According to the Ifo Business Surveys the business climate for architects has clearly brightened since the summer of last year and since the autumn of last year also for building contractors. The medium- and long-term outlook also shows an upward trend, albeit moderate. This is the conclusion drawn in the Ifo Institute's third edition of the ten-year construction forecast for Germany (Bauvorausschätzung). Based on the calculations of the Ifo Institute, the average real growth of building demand during the next ten years will only be about 2/3% p.a. In the analysed ten-year period from 2004 to 2013, approximately 3.15 million housing units will be completed, of which 1.8 million will be one- and two-family houses. In non-residential construction, public-sector construction will continue to lose importance; in commercial construction a clear revival of demand will occur during the middle of the next decade at the latest.