Construction key for Germany as recession bites

By Mike Hayes15 May 2020


Construction site in Cologne, Germany

The German government announced today that the coronavirus crisis has pushed the country into recession.

Official figures from the Federal Statistics Office show the German economy contracted by 2.2% in the first three months of 2020. This follows a 0.1% contraction for the final quarter of 2019.

The figures, however, demonstrate that the German economy has been relatively resilient through the crisis, compared with neighbouring France (down 5.8%) and Italy (down 4.7%).

The potential for optimism stems in part from the German government’s decision to allow construction to continue while other sectors were shut down during measures to prevent the spread of the virus.

As Germany now begins to relax those measures, construction activity will be seen as a driver for economic recovery.

Dieter Babiel, head of the German construction industry association, HDB, told the Financial Times that the industry was currently operating at around 80% of its normal capacity.

Although some sites were forced to close, either due to quarantine measures or staff shortages, the majority went ahead, according to Babiel, who said, “In some cases we had some problems with supplies of materials, but even from Italy we still get tiles. It worked relatively well, much better than we feared at the beginning.”

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