(Reuters) – Germany’s construction industry is expected to contract by 4 percent this year, more than an initial forecast of 3.5 percent, leading to the loss of around 10,000 jobs, according to a study released on Tuesday by the German Construction Industry Federation (HDB).
The sector is weighed down by the fall in residential construction, whose sales are expected to fall by 12% in real terms, while public construction work will be weaker than expected, according to the report.
The study adds to an overall pessimistic outlook for the construction sector in Europe’s largest economy, held back by rising interest rates, high inflation and stagnant economic activity.
“Another figure is particularly painful: in the employment forecast, we expect a reduction of 10,000 employees,” said Peter Huebner, chairman of the HDB, before adding: “There can only be one solution: build, build, build.”
According to the study, the only growing sector will be commercial construction, which will see sales increase by 1.5%, boosted by large orders from Deutsche Bahn, power grid operators and local transport.
(Reporting by Klaus Lauer, writing by Matthias Williams; Dimitri Rhodes, editing by Blandine Hénault)
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