Construction in Germany: Betongold at a turning point?

Over the last few years we have seen robust growth in the German construction sector (+2.8% in 2012 and +4.4% in 2013), driven by residential housing. This positive trend is based on a positive economic environment coupled with and a demographic boost.

We expect this positive trend to moderate in 2014 with +3.5%, due to increased house prices, regulation of rents, low public investments. In 2015, further GDP growth and an increase in public investment in construction should push growth output to +5.3%.

As for companies in the sector, because of elevated input costs, margins are low (estimated at 6% in 2014-15) and risk of non-payment remains high as DSO (36 days on average) is above other sectors. However insolvencies should further decrease this year and next: -3% in 2014 and -5% in 2015, a slower pace compared to 2013.

Construction in Germany: Betongold at a turning point? - Report


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