German construction sector shows mixed signals amid Bavarian revenue growth

The German residential construction sector showed signs of slight improvement in July, according to the Ifo Institute. The business climate index rose from -30.6 to -29.3 points. While companies reported a better current situation, future expectations remained pessimistic. Klaus Wohlrabe, head of Ifo surveys, noted that while increased building permits are beginning to reach the industry, the path to a broad recovery remains long. Although the proportion of companies reporting insufficient orders decreased, project cancellations rose to 13.1 percent.

In Bavaria, the main construction industry reported significant growth in June 2026. Revenue reached approximately 2.14 billion euros, an 11.7 percent increase compared to the previous year. Order intake in the Bavarian main construction sector saw a substantial rise of 25.0 percent, totaling 2.32 billion euros. The largest absolute increase in orders occurred in commercial and industrial structural engineering, which grew by 77.5 percent. Despite these gains, revenue in public structural engineering for local authorities and social insurance providers saw a slight decline of 0.9 percent.