01.07.2017 | Minutes and reports |

Structural data on production and employment in construction industry – calculations for 2016

German Institute for Economic Research (DIW Berlin) Study

The study was carried out to present an overview of the construction industry using basic data outlining the structure of companies in general and by line of business according to revenue and employment. As these statistics only represent part of the construction industry, a comprehensive account can only be obtained by using other sources for comparison and making additional calculations. The study also helps to provide a consistent overview of the employment trends in this sector. DIW Berlin’s construction volume accounting uses an approach for calculating construction investments that is methodologically similar to national accounting (NAS). However, construction volume accounting goes deeper than national accounting as it includes non-investment construction services.

Examining the structure of the building sector, differentiated by work on new construction projects and on existing buildings, is a perspective that is becoming more important for the evaluation of economic policy. Work on existing buildings may include conversion, extension, modernisation, refurbishment and maintenance. Calculations here should be based on residential buildings. However, model calculations for comparing the scale of work on new projects to work on existing buildings are also required for the non-residential sector Following a significant increase in construction volume in 2016 of 4.6 percent overall compared to 2015, to around 350 billion euros, further acceleration of more than 5 percent is expected for the current and upcoming year. This can be attributed to sharper rises in construction prices than in past years, among other factors. Key raw materials have recently become considerably more expensive and capacities in the building sector are being heavily utilised. Over the last few years, little adjustment has been made to production capacity in the building sector to meet increasing demand. Between 2010 and 2014, demand for construction work grew by around 9.5 percent. Over the same period, employment figures in the sector rose by some 1.5 percent while real capital stock in the building sector remained static.

The high volume of orders on hand in every line of the sector also indicates continued vigorous growth in construction activity. Housing construction is expected to grow by a real 2.3 percent this year and 3.2 percent in the coming year; a 2.5 percent increase is anticipated in commercial construction this year and 1.4 percent in 2018. In terms of public works construction, the value of the building volume will see a real increase of 2.1 percent this year and hold the line in 2018 with a slight increase of 0.4 percent.