Building boom vs. Crisis: Global analysis reveals surprising winners and losers
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Published on: March 25, 2025 / update from: March 25, 2025 - Author: Konrad Wolfenstein
Building boom vs. Crisis: Global analysis reveals surprising winners and losers-Image: Xpert.digital
Fack of skilled workers & orders: alarm bells for the construction industry - global solutions were wanted
The construction industry in global economic context: a comprehensive analysis of the current situation
The construction industry, a fundamental pillar of the global economy, is currently presenting itself in a complex and dynamic state. A global overview reveals a mosaic of different economic conditions, in which growth and challenges alternate and interlock. While some nations and continents have robust growth and look optimistically into the future, others fight with considerable difficulties and a noticeable downward trend.
A recurring motif that runs through many developed economies is the current weakness of the housing sector. This sector, traditionally an engine of the construction industry, experiences a phase of stagnation or even decline in numerous countries. In contrast, there is often a more resistant growth in the infrastructure sector. State investment programs, the urgent need for modernization of outdated infrastructure and global striving for improved connectivity drive this sector ahead.
The United States is currently experiencing a remarkable upswing in the industrial sector. Driven by ambitious state funding programs and a shift in production capacities, new factories and industrial plants are created there at a rapid pace. China, on the other hand, navigates through a more complex situation that is characterized by persistent economic growth, but also by a emerging real estate crisis. Japan shows signs of moderate economic recovery, while South Korea is confronted with an economic weakening at short notice, but is optimistic about the future in the long term.
Regardless of regional differences, many countries and regions share similar challenges. The ubiquitous shortage of skilled workers, which is noticeable in many industries, is also a serious problem in the construction industry. Rising construction costs, driven by inflation, material bottlenecks and geopolitical uncertainties, strain the profitability of construction projects worldwide. The economic development of the construction industry is largely influenced by state funding programs, global economic cycles and specific regional factors. Political decisions, technological innovations and social trends also play a crucial role in the design of the future landscape of this vital industry.
The headlines:
- Housing collapse & infrastructure boom-the 2 faces of the construction industry in the EU
- China in the construction dilemma: real estate crisis vs. green tech offensive-which is now important
- USA is experiencing industrial revolution in construction
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Germany: between a lack of order and the glimmer of hope
The German construction industry is currently in a phase of economic contraction. After a challenging year, a slowdown of the decline in sales is expected for the coming year, but there is currently no question of a quick relaxation. For the current year, a real sales decline of around three and a half percent is forecast, which is expected to weaken over one percent in the following year. Despite this real decline, the nominal turnover achieved considerable sums a year, which underlines the still immense economic importance of the industry.
The mood in the German main industry recently showed slight lightening, but remains at a steamed level. This development could be an indication that the downward movement slows down and the industry may reach a low point. However, an immediate and powerful recovery is unlikely in view of the still existing challenges. The slowdown of the decline in sales and the easy improvement of the mood could be interpreted as a delicate sign of stabilization, even if the German construction industry still has a stony path in front of it.
Sector -specific analysis in Germany: Housing in the crisis, civil engineering as a support
Housing is the largest problem child in the German construction industry. For the current year, a significant real decline in sales in the double -digit percentage range is expected, followed by a further decline in the coming year. The number of apartments completed is expected to continue to decrease and is therefore far below the ambitious goals of the Federal Government. The declared goal of 400,000 new apartments annually moves far away and illustrates the deep crisis in which the housing sector is located. A significant decline in building permits underpins the pessimistic expectations for this segment and suggests a persistently weak development.
The reasons for this misery are diverse and complex. High construction and financing costs, paired with increased interest rates, make mortgage loans more expensive and make real estate acquisition unaffordable for many people. In addition, regulatory hurdles and protracted approval procedures burden housing construction. The combination of these factors leads to investment restraint and a significant slowdown with construction activity in the apartment sector.
In contrast, business construction presents itself in a more differentiated light. While economic buildings also have to struggle with declines of sales and no significant improvement is expected for the coming year, business civil engineering is a considerable growth. This growth is primarily supported by extensive investments in infrastructure projects in the course of the energy and mobility transition. The expansion of rail paths, electricity lines and broadband networks requires considerable construction work and ensures high demand in business civil engineering.
It is even expected that business creation will be more sales for the first time in the coming year than business buildings. The weak overall economic situation and the uncertainties in the processing industry, on the other hand, put a strain on economic buildings. Investment retention in commercial buildings and production facilities leads to a subdued demand in this segment.
The public building showed moderate real sales growth last year. However, stagnation will be expected for the coming year. The growth last year was driven by investing in traffic routes and building renovations. However, there are considerable investment residues in the public infrastructure that amounts to a three -digit billion -dollar amount. However, financial bottlenecks and bureaucratic hurdles make it difficult to implement planned modernizations of schools, hospitals and other public buildings. The expected stagnation in the coming year is primarily due to these financial restrictions and possible delays in new projects due to the tense budget situation.
Challenges and outlook for the German construction industry: a shortage of skilled workers and orders
A growing proportion of construction companies in Germany complains about production disabilities due to lack of order. This proportion has increased continuously in recent years and has now reached a worrying value. This indicates a weak demand in certain segments of the hardware store, especially in building construction. At the same time, the shortage of skilled workers remains one of the biggest challenges for the industry, especially in civil engineering. Despite the economic weakening, over half of the construction companies continue to state that they have difficulties in the occupation of vacancies. The lack of qualified specialists brakes the performance of the industry and endangers the timely completion of projects.
The number of bankruptcies in the main building has also increased in recent months. This development reflects the difficult economic conditions under which many construction companies operate. Increasing costs, lack of order and the increasing competitive pressure put many companies under considerable pressure. It should be noted positively that stable material prices are expected for the coming year. According to the volatility of the past few years, this could mean a certain relief for the companies. The combination of a lack of order and shortage of skilled workers is a complex challenge. While the lack of order indicates inadequate demand, the lack of skilled workers could affect the ability of the companies to process existing orders or to accept new ones, even if the demand attracts demand. The German construction industry is faced with the task of managing these opposite challenges and at the same time shaping structural change towards more sustainability and digitization.
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European Union: Heterogeneous Development and Behavior
The economic situation of the construction industry in the European Union presents itself as a heterogeneous picture. While the season -adjusted production in the building industry in the euro zone has recently risen slightly, it fell slightly in the EU overall. A decline in the European building volume is expected for the past year, followed by a weak relaxation in the coming year. At the same time, the labor costs in the euro zone and the entire EU have increased. This data indicates an overall managing economic development of the construction industry in the EU, whereby the differences between the euro zone and the other Member States must be observed. The EU construction industry navigates through a complex interplay of economic fluctuations, political influences and structural challenges.
Sector -specific trends in the EU: housing under pressure, infrastructure as a growth driver
Similar to Germany, a significant contraction in housing is also expected throughout the EU, which is expected to continue in the coming year. This decline is due to high real estate prices, further increased interest rates and high construction costs. In contrast, infrastructure projects are identified as an important growth driver, supported by the EU reorganization and national investments. The focus here is on the digital infrastructure, the energy transition and the expansion of traffic networks. The non -residential construction also faces challenges, but is expected to record growth again from next year, supported by publicly financed market segments and initiatives for green construction. The EU increasingly relies on sustainable building practices and promotes investments in environmentally friendly technologies and materials.
Challenges and opportunities in the EU: shortage of skilled workers and rising house prices
A persistent shortage of labor is reported throughout the EU. This is a structural problem that is due to an aging workforce and a lack of young talent. At the same time, prices for existing houses are increasing again, which could make new construction projects more attractive in some regions. However, high new construction costs can destroy this advantage again. The performance of the construction industry varies significantly between the Member States. For example, Germany and Spain are still confronted with problems, while the Netherlands and Poland have stronger growth potential. Coping with the shortage of labor and the use of rising house prices could be crucial opportunities for the EU building sector to improve its growth prospects. However, the ability to benefit from rising house prices depends on whether the costs for new buildings can be controlled. The EU building industry faces the challenge of strengthening its competitiveness, promoting innovations and at the same time making a contribution to the union's ambitious climate goals.
Europe (without EU): Different dynamics in the United Kingdom, Switzerland and Norway
In the United Kingdom, an average annual growth of construction activities is expected for the coming years. This growth is to be carried by a low starting position as well as falling interest and inflation and extend to the areas of infrastructure, office and housing construction. There are still challenges in the shortage of skilled workers and increasing costs, which are reinforced by Brexit. The United Kingdom tries to combat the shortage of skilled workers through targeted measures and to promote investments in the construction industry.
In Switzerland, current indicators indicate a slight increase in sales in the construction sector. Housing should grow in the coming year, which should benefit from lower interest rates. However, the industry faces challenges such as land shortages, strict regulations and high financing requirements. Switzerland relies on high -quality construction and sustainability, which can lead to higher construction costs, but ensures the value of the real estate in the long term.
Norway recorded a decline in gross domestic product in the construction sector last year, mainly driven by a weak housing market with a significant break -in of new construction activity. However, investments in infrastructure projects and renewable energies are continued. For the coming year, signs of relaxation will be expected, which could be triggered by the living space requirement and a possible end of rising interest rates. Norway benefits from its natural resources and increasingly invests in green technologies and sustainable infrastructure.
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Housing crisis vs. Infrastructure boom: The dynamics of the construction industry
Housing crisis vs. Infrastructure boom: The dynamics of the construction industry-Image: Xpert.digital
United States of America: Boom in the industrial sector and massive infrastructure investments
The US construction industry benefits from robust economic growth. An essential growth driver is the boom in the industrial sector, which was triggered by state initiatives. These laws have led to considerable investments in the construction of new production facilities, especially in the areas of electromobility, solar equipment and semiconductors. In addition, a further infrastructure law steered massive funds into the expansion of the infrastructure. The United States is experiencing a renaissance of industrial production and investing massively in its infrastructure to strengthen competitiveness and create jobs.
Sector -specific analysis in the USA: industrial building as a growth engine, housing construction before relaxation
The industrial sector has recorded a multiplication of construction work in recent years and has now been a significant proportion of all construction work in the United States. Another nominal growth is expected for the coming year, followed by stabilization at a high level. However, political uncertainties could influence further investments in this area. Housing was affected by high interest rates last year. However, there is hope for a recovery in the coming year, since analysts expect interest rate cuts. The demand for living space is expected to continue to increase due to population growth and urbanization. Infrastructure construction benefits from massive investments by the Infrastructure Act. These funds flow into projects in the areas of streets, bridges, public transport, broadband and more. The private sector is also involved in infrastructure projects. A strong increase in construction activity can be observed, especially in the street and water sector.
Challenges and opportunities in the USA: shortage of skilled workers and digital transformation
The US construction industry is still faced with the challenge of the shortage of skilled workers. Much of the contractors report difficulties in recruiting specialists. In addition, rising material costs put a strain on the industry. The need for digital transformation and the introduction of new technologies to increase efficiency are further challenges. However, there are significant opportunities for German manufacturers of building materials and construction equipment on the large and growing US market. The United States is an attractive market for innovative construction technologies and sustainable building materials.
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China: growth despite the real estate crisis and focus on green technologies
The Chinese construction industry has recorded considerable growth in recent years, which underlines its importance for the Chinese economy. The progressive urbanization continues to drive demand. The Chinese government places a strong focus on infrastructure development, especially in the areas of energy, transport and the environment. China is massively investing in its infrastructure to boost economic growth and improve the quality of life of the population.
Important trends and government initiatives in China: steel construction, finished part construction and green materials
The government actively promotes the use of steel structures, prefabricated buildings and environmentally friendly materials to reduce CO2 emissions and increase efficiency. Significant investments in the expansion of the high -speed rail network will be made, which is to be doubled in the next few years. In addition, the modular construction is forced to reduce labor costs and reduce construction times. China focuses on innovative construction technologies and strives for a pioneering role in the area of sustainable construction.
Challenges and risks in China: real estate crisis and overcapacity
The ongoing real estate crisis with high debt stands and falling demand is a significant challenge. Many project developers are faced with bankruptcy and construction stops. The potential effects of trade and technology conflicts with other countries could also have a negative impact on the industry. In addition, there are concerns about overcapacity in key industries such as solar and electric vehicles, which could affect demand for commercial and industrial buildings. The Chinese government tries to cope with the real estate crisis and at the same time maintain economic growth.
Outlook for China: uncertainties and growth potential
The Chinese economy achieved considerable overall growth last year, supported by industrial production. However, the outlook for the coming year is unsure, with a growth forecast that has been slightly reduced, which is due to a weak consumption demand and the ongoing real estate crisis. Nevertheless, an average annual growth for the coming years is forecast for the construction industry, driven by urbanization and infrastructure projects. The Chinese construction industry remains an important growth driver of the global economy, but faces considerable challenges.
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Japan: moderate relaxation and investments in urban development and technology
The construction industry has contributed a relevant share of Japanese GDP in recent years. An average annual market growth is expected for the coming years. An increase in building investments is expected for the current fiscal year. Japan tries to revive his economy after years of stagnation, and the construction industry plays an important role.
Important projects and investments in Japan: Urban Development, Expo 2025 and semiconductor industry
In Tokyo, numerous urban development projects are planned and implemented, including in important districts. Osaka is preparing for Expo 2025, which leads to an investment boost in the city. Large investments in semiconductor projects are planned in the Kyushu and Hokkaido region. In addition, investments in logistics centers and data centers are made. Japan relies on technological innovation and tries to strengthen his position in key industries such as semiconductor production.
Important challenges in Japan: aging the workforce and rising property prices
The Japanese construction industry faces challenges such as the aging of the workforce, increasing property prices and the need to modernize the aging infrastructure. In addition, there are strict building standards in Japan, especially with regard to earthquake security. The demographic change and the aging infrastructure poses great challenges that also affect the construction industry.
Outlook for Japan: slow recovery and focus on modernization
The market size of the Japanese construction industry will be estimated to be several hundred billion US dollars for the coming years. Overall economic growth is expected for the upcoming fiscal year. In the current year, the added value decreased in the construction sector, but the investments seem to attract. The Japanese construction industry is in a phase of slow recovery and focuses on modernizing the infrastructure and adapting to the demographic changes.
South Korea: short -term contraction, long -term growth potential
The South Korean construction industry is expected to have a real decline in production in the coming years. This indicates a current weakening. In addition, the number of building permits on display has dropped, which indicates a weaker pipeline of future projects. Increasing construction costs and increasing bankruptcies at construction companies reflect the challenging economic conditions. South Korea fights with economic headings and structural problems in the construction industry.
Sector -specific challenges and trends in South Korea: Housing construction weak, abroad strong
The housing sector shows a weakness and contributes significantly to the overall decline. However, Korean construction companies are very successful abroad and secure significant orders, especially in the Middle East. The government focuses on the semiconductor industry and projects in the field of renewable energies, which could potentially lead to construction facilities in these sectors. South Korea relies on its export -oriented construction industry and invests in future technologies such as semiconductor and renewable energies.
Long -term growth potential in South Korea: semiconductor industry and infrastructure
The overall market size is estimated on a three-digit billion-dollar amount in US dollars, with a forecast average annual growth rate of over four percent. The expected growth is supported by investing in the semiconductor industry and the infrastructure. The government is pursuing the goal of reaching a global market share of ten percent in the area of systemhal leders by 2030. Despite short -term challenges, South Korea is optimistic about the future and relies on innovation and technological progress as a growth driver for the construction industry.
Comparative analysis of the economic situation: similarities and differences
A direct comparison of the most important growth indicators shows significant differences and similarities. Housing construction struggles with difficulties in many developed economies, while the infrastructure sector is often more stable or growing. The United States stands out with a strong boom in the industrial sector. Despite a real estate crisis, China continues to have growth in the construction sector. South Korea is experiencing a contraction at short notice, but looks optimistically into the future in the long term. Japan shows a moderate but constant relaxation. The United Kingdom seems to be more resistant than many EU countries. Common challenges such as a shortage of skilled workers and rising costs are present in several regions. State support programs and global economic factors significantly influence the regional hardware stores. The global construction industry is characterized by complex regional dynamics and global trends.
Transformation and opportunities in a changing world
The global construction industry presents itself in a phase of the transition. While some regions benefit from strong economic growth and targeted state investments, others are faced with considerable challenges, especially in the housing sector. Infrastructure construction proves to be a stabilizing factor in many regions. The ability of the industry to cope with the shortage of skilled workers, to control increasing costs and to use the opportunities of digital transformation will be crucial for future development. The different regional dynamics reflect the complex interactions between global economic trends and local peculiarities. In the long term, technological advances and initiatives in the field of sustainability offer considerable opportunities for the construction industry worldwide. The construction industry faces the task of adapting to a changing world and at the same time asserting its role as the motor of economic growth and designers of the built environment. The future of the construction industry will be characterized by innovation, sustainability and the ability to master global challenges and at the same time meet local needs.
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