Despite a decline in energy efficient investment, the German construction industry is booming.
In 2014, the German construction industry contributed 10.1% to the German GDP, and moreover employed 5.8% of the labour force. About EUR 294bn were spent on construction, with residential construction being by far the most important sector (around 59%). Roughly 29% was generated by commercial construction and the remaining 12% by public construction projects.
The German construction market is dominated by small companies. 65% of all construction companies have less than 49 employees but generate 51% of the total industry turnover. The turnover of the construction industry has increased by 2.6% in 2014 in comparison to the previous year.
Residential construction is booming as well. According to the German Institute for Economic Research (DIW Berlin), buildings have been constructed or modernized worth EUR 338bn in 2015. Residential construction has grown by 2.7% in the same year and is expected to grow by 2.2% in 2016. Public construction is predicted to increase by 2.8% this year.
With its expertise in the fields of energy-efficient modernisation of buildings, renewable energies, and industrial insulation, the German construction industry, in cooperation with architects, designers and facility managers, contributes greatly to climate protection. However, the development of construction work on existing residential buildings did not grow as much, caused by the declining volume of investment in energy-efficiency of residential buildings (DIW Berlin 2015). Investment in Energy-efficient refurbishment has declined by 15%, which is believed to be caused by the low oil price and reduced subsidies for photovoltaic.
New Zealand's construction sector is one of the largest sectors in the economy, employing more than 181,000 people, which is over 8% of the workforce and consequently benefits from the current labour growth. In particular, the sector contributed with around 5.5% to the national GDP in 2015. Potential growth areas are the regions Auckland, Canterbury, Waikato and Otago/Southland.
New Zealand’s boom sector is expected to be the driving economic force in the future. Two major projects with high investment costs and new job opportunities deserve special attention:
- A total of 40 billion NZD will be spent on the rebuild of the earthquake destroyed city of Christchurch which equates to approx. 20% of the GDP
- New Zealand’s largest city Auckland will see a major development as the city anticipates an additional 1 million inhabitants by 2040. The housing shortage in New Zealand’s largest city calls for action, 2 billion NZD is spent each year on accommodation subsidies. An extra of 80,000 new homes are predicted to be built until 2020. Additionally, Auckland is investing 10 billion NZD into the construction of two additional motorways and the extension of its port and railway system.
Further significant New Zealand construction projects are planned, e.g. a 200 million NZD Auckland waterfront hotel and a six-lane road tunnel as a new harbour crossing for Auckland.
Business opportunities for German exporters of building materials are aplenty along with the need of e.g. skilled workers, engineers, consultants and architects.
Please contact us for more information about the New Zealand or German market.