NEWS & EVENTSPicture source: letsbuild.comGermany’s construction industry output expected togrow 1.9% in 2022 despite shortage in constructionmaterials and escalating costs, says GlobalDataSupported by investments on transport infrastructure projects, inline with the German government’s focus on improving regionalconnectivity, the country’s construction industry is expected toregain growth momentum and expand by 1.9% this year. Despitethe rising costs, the industry recorded a good start in 2022, withconstruction value expanding by 2.2% year-on-year (YoY) in thefirst quarter, observes GlobalData, a leading data and analyticscompany.Danny Richards, Lead Economist at GlobalData, comments:“Following the growth in 2022, the German construction industryis expected to register an annual average growth of 1.8% from2023 to 2026, supported by the government’s investment oninfrastructure, residential and renewable energy projects.However, the short-term outlook is subject to downside riskamid the fall-out from Russia’s invasion of Ukraine, which hasweighed on investor confidence and further elevated energy andconstruction material prices.”GlobalData’s latest report, ‘Germany Construction MarketSize, Trends and Forecasts by Sector – Commercial, Industrial,Infrastructure, Energy and Utilities, Institutional and ResidentialMarket Analysis, 2022-2026,’ reveals that the German governmenthad revised its inflation forecast from 3.3% to 6.1% this year.Following Russia’s invasion of Ukraine, inflation rose to its highestlevel in 40 years in March 2022 as prices of natural gas and oilproducts surged. To help consumers cope with soaring energycosts and help Germany reduce its dependence on Russian gas,the government announced relief measures worth EUR16 billion($19.1 billion) in March 2022.Richards continues: “Despite the high material prices, theindustry is expected to post growth in 2022 owing to significantplanned investments, including most notably in the transportationand energy and utilities segments, in contrast to the contractionseen last year.“The appointment of the Scholz government in December2021 is also expected to facilitate growth in the industry, withtheir priorities including extending rent control policies, building400,000 new apartments every year – including 100,000 socialhousing units – expanding renewable energy generation,Picture source: letsbuild.comstrengthening public transport networks, and hiking the minimumhourly wage from under EUR10 ($12.2) currently to EUR12($14.6).”In April 2022, the Federal Ministry for Economy and ClimateProtection presented the coalition government’s ‘Easter Package’for renewable energy, which revises various energy laws toexpedite the expansion of renewable energy sources.Forecast-period growth in the German construction industrywill also be supported by investments on oil and gas projects,in line with the government’s plan to reduce its dependence onRussian imports.As well as this, by 2030, Germany aims to nearly double theshare of renewables in its total electricity consumption from41.1% in 2020 to 80% by 2030. To achieve this target, onshorewind installations are targeted to rise by an average of 10GW peryear, to reach a cumulative capacity of 115GW by the end of 2030,while the solar capacity is expected to rise by an average of 22GWper annum, to reach a cumulative capacity of 215GW by that year.In May 2022, Germany’s federal cabinet gave an approvalto draft a legislation for accelerating the construction of importterminals for Liquefied Natural Gas (LNG). The law will beapplicable for floating and land-based LNG import terminals.14 May-June 2022 | www.b-i.biz
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