German construction sector says downturn not over, urges faster action

BERLIN, June 11 (Reuters) - Germany's construction sector has not yet emerged from its downturn, with a tentative recovery being hit by a new geopolitical price shock, the head of its main industry association said on Thursday.

Marcus Nachbauer, chairman of the Bundesvereinigung Bauwirtschaft, said the conflict in the Middle East, with its temporary closure of the Strait of Hormuz, had driven up energy and raw material prices, burdening firms already suffering from weak demand.

"Bitumen, concrete and cement, plastics, diesel and heating oil have become noticeably more expensive within a few weeks," Nachbauer said, citing a survey in which around 80% of companies reported higher bitumen and plastics prices.

The association's member companies generated revenue of around €432 billion ($500 billion) in 2025, a nominal 0.8% rise, driven mainly by price effects.

The association expects 2026 revenue to remain at last year's level, but only because higher prices offset weaker construction volumes.

Nachbauer said Germany needed faster planning and approval procedures, reliable housing subsidies and infrastructure investment that reaches municipalities.

"Building is economic policy," he said, adding that the sector had the capacity to help lift Germany out of stagnation if conditions improved.

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(Reporting by Maria Martinez, editing by Thomas Seythal)