German construction industry cuts 2026 revenue forecast

The German construction industry has significantly lowered its revenue forecast for 2026, reducing expectations from 2.5 percent to just 1 percent. This downward revision is driven by sharply rising construction costs and high prices for energy—including electricity, gas, and fuel—as well as raw materials, which are offsetting slight increases in revenue.

Tim-Oliver Müller, Managing Director of the Main Association of the German Construction Industry (HDB), noted that the original forecast is no longer sustainable due to the slowdown in construction activity through May and escalating costs. The residential construction sector is expected to be particularly affected, with a projected real revenue increase of only 0.5 percent.

Despite rising building permit numbers, the Ifo Institute predicts that only a maximum of 185,000 new homes will be completed by the end of 2026. This figure represents a decrease of 22,000 units compared to the crisis year of 2025.