"Construction is economic policy"

The social partners in the construction industry have published a joint position paper entitled "Construction is economic policy – ​​How the construction industry can lead Germany out of stagnation and what is needed for this".

Representatives of the federal government and the social partners are meeting at the Chancellery to discuss how to overcome Germany's economic weakness. Following the recession of 2023 and 2024 and the minimal growth last year, the economy needs to be revived.

The weak economy is also resulting in a growing housing shortage, say the social partners in the construction industry. To solve this problem, the economic engine must restart. The construction industry can play a crucial role in this: "It combines growth, employment, and social cohesion like almost no other sector."

Construction industry as an economic engine

Position paperHere you can find the detailed document: "Construction is economic policy – ​​How the construction industry can lead Germany out of stagnation and what is needed for this".The social partners in the construction industry have issued a statement regarding the upcoming talks between politicians, employers, and unions. Central Association of the German Construction Industry, the Industrial Union of Construction, Agriculture and Environment and Association of the German Construction Industry, a joint position paper entitled "Construction is economic policy – ​​How the construction industry can lead Germany out of stagnation and what is needed for this" was published.

According to the latest forecast from the Council of Economic Experts, economic growth will only reach 0,5 percent in 2026. The main reasons cited are rising energy prices and international trade conflicts. At the same time, only 206.600 new homes were completed in 2025, the lowest number in over ten years – while demand is around 400.000 annually.

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Free capacity for rapid recovery

The construction industry employs around 2,6 million people and generates over €150 billion in added value annually. "Currently, there is spare capacity in both building construction and civil engineering that can be used for new projects at short notice. Scientific studies show that every euro invested in construction triggers an economic multiplier effect of 1,3 to 1,5 – significantly more than consumption-oriented measures."

To use the construction industry as an engine of economic growth, the associations propose the following measures:

• Extend and improve the KfW funding program for climate-friendly new buildings (EH 55): Favorable interest rates and flexible repayment models are intended to stimulate more construction projects.
• Adjust special depreciation allowance (AfA): The subsidy for rental housing construction is to be extended to the efficiency house standard 55.
• Activate backlog of construction projects: Temporary special conditions are to apply to the approximately 453.000 approved but not yet started apartments.
• Real estate transfer tax exemption and KfW subordinated loans: These instruments make it easier for middle-income households to acquire residential property.
• Expand social and affordable housing: Federal and state funding should be made permanent and increased.
• Modernizing infrastructure: Investments in transport, energy and digitalization are a prerequisite for competitiveness and location attractiveness.
• To ensure fair competition: undeclared work and social dumping must be combated consistently.
• Accelerating planning and approval processes: Digitization and nationwide recognition of type approvals are key levers.

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