Clear mid-term recovery of commercial construction in Germany

At the end of 2005, the Ifo Institute published its latest construction forecast for Germany, a ten-year prognosis of building activity in various sectors. Especially in commercial building the prolonged slump will come to an end. The medium-term outlook for commercial construction is relatively good. The upturn in the business cycle in the economy will also affect construction measures this year, after having had a noticeable affect on capital expenditure in 2004 and 2005. But also the extensive building volume that came about in the wake of German reunification has now been basically absorbed by the market. Public-sector as well as residential construction will not show clear recovery tendencies until after one or two years. Whereas the long-term forecast for the coming ten years is divided into eastern and western Germany, the mid-term estimates are made for six large regions. According to the calculations of the Ifo Institute, construction demand will increase by an average of 1% per annum for the next ten years. Commercial building will be the only construction sector to clearly exceed this average during the forecast period. In Germany as a whole, total commercial construction in 2015 will amount to €72½ billion (in prices of 2000), about 12% above the level of 2005.