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Industry report: Construction in Germany: Slower growth ahead



​Executive summary


  •  Euler Hermes forecasts a +2% growth rate for the German construction sector in 2015, after a +3% growth in 2014. This positive trend is set to continue thanks to robust demand in the residential and private housing segments, supported by net migration inflows and a rising rate of urbanization.


  • The slight deceleration is explained by: (i) uncertainty about the level of public spending; (ii) potential deceleration of housing prices - in the wake of modest growth of disposable income; and (iii) a more limited effect of low interest rates.


  • Profitability (EBITDA over net sales) of companies in the construction sector is expected to remain stable at 5.9% in 2015. The positive effect of lower energy prices is entirely offset by higher personnel costs. Insolvencies will continue to decrease but less rapidly (-3% in 2015) totalling 3,850 cases in 2015.