Enhanced conditions prevail in the construction sector
The construction industry in Stuttgart and Germany is showing a cautiously optimistic economic outlook, with some growth drivers emerging in the sector. According to the Statistical Office of the State, the number of residential units approved for construction increased slightly by 1.7% compared to the previous year.
The order intake trends, however, vary by sector. General manufacturing order intake in Germany increased modestly by 0.4% in May 2025 after seasonal adjustment, signaling a slight recovery momentum that may indirectly affect construction-related manufacturing.
Construction material innovation and sustainability trends, such as wooden and prefabricated construction, are identified as key growth drivers in the German market, with expectations of mid- to long-term business growth of around 10%. Renewable energy construction, an important sub-sector of infrastructure, has experienced strong order intake growth. For instance, wind energy projects in Germany saw significant rises in orders, with companies like Nordex and PNE Group securing large contracts and commissioning new capacity in mid-2025.
The macroeconomic environment remains uncertain, with guidance emphasizing the normalization of interest rates, inflation, material prices, and supply chains as prerequisites for stronger growth. Regulatory factors, such as easing residential construction rules and support for serial (prefabricated) construction, are expected to encourage higher construction activity. Sustainability, especially through wood-based construction, is a strong policy and market trend aligned with government goals to make building sectors more sustainable and address housing affordability.
Thomas Moeller, Managing Director of the Baden-Württemberg Construction Industry Association, commented on the April figures, stating that while there is currently no talk of a solid upswing in the construction industry, the overall outlook appears more favorable than it did last year. However, he also emphasized that no solid upswing in the construction industry has been achieved yet, and the industry's economic situation remains fragile.
The construction industry association expects economic stimulus in the second half of the year from the federal government's special fund for infrastructure in road construction and other civil engineering. Concrete orders from the additional funds are expected in the second half of the year, according to association experts.
For more information, contact Thomas Moeller at 0711 66601-131 or visit our website.
The finance sector may indirectly influence the construction industry due to the slight recovery momentum in general manufacturing order intake in Germany, signaling a potential positive impact on construction-related manufacturing. The business growth of the construction industry in Germany is anticipated to increase, primarily driven by innovations in construction materials and sustainability trends, such as wooden and prefabricated construction, which are expected to provide mid- to long-term growth of around 10%.
