Building materials industry calls for a clear growth agenda for 2025
The building materials industry has been in a sustained economic downturn since the beginning of 2022. The industry’s production has slumped by around a quarter compared to 2021, with sectors dependent on residential construction in particular experiencing even greater declines. Although the rates of decline are gradually slowing, building materials production in 2025 is likely to stabilize at a very low level at best compared to the previous year. “We are looking to the new year with uncertainty,” says Matthias Frederichs, Managing Director of the German Building Materials Association (bbs), “despite an increasingly real reduction in capacity, it is not yet possible to say when we will finally have reached the bottom of the economic cycle.” In residential construction, the declining figures for building permits and incoming orders are continuing. The great uncertainty in the economy as a whole is also leading to a significant decline in investment, particularly in the construction sector. In addition, it is becoming increasingly clear that the public sector, which has had a stabilizing effect in the building construction crisis to date, is reducing its investment activity in light of the end of the traffic light coalition and the pending budget decisions for 2025. Among other things, this affects key projects in the area of federal transportation routes.
According to the association, the upcoming federal elections in February in particular will therefore be decisive in turning the tide of the construction industry. “Climate protection, the welfare state and quality of life - all of these are directly linked to a functioning economy,” explains Frederichs. “The new federal government must therefore set out a clear growth agenda in the first 100 days.” The building materials industry expects a noticeable reduction in bureaucratic obligations and an end to the overfulfilment of European requirements. According to Frederichs, more efficient planning and approval procedures for infrastructure and securing raw materials are also needed, as well as reliable and permanent access to affordable green energy. In order for residential construction to pick up again, there should be no tightening of building regulations in the medium term; at the same time, a reliable path for implementing the EU Buildings Directive must be developed in the near future.
However, according to the Building Materials Association, individual important projects should already be implemented before the upcoming election. In particular, a resolution on the Carbon Dioxide Storage Act (KSpTg) is possible following signals of approval from the CDU/CSU and FDP. Frederichs emphasizes that some energy-intensive production processes can only be fully decarbonized with the capture, storage and use of CO2. Now it is important that the SPD and Greens also approve the important law: “The minority government must decide in January whether it stands for a policy that cleverly combines effective climate protection and competitive industry. This will also send an important signal for February 23.” More consistent action is generally a good New Year’s resolution for German politics. However, Frederichs also points out that the new government has little time to settle in. In 2025, Germany has now started the new year without a budget for the second time in a row. If there is agreement within the new government on the federal budget and the growth agenda by the summer, this would already be “an important step in the right direction.”
