Moderate growth for German construction materials

The German Building Materials Association (BBS) has forecast at least 2% growth in domestic output for 2012, compared to output of 11% in 2011.

The BBS said the 2012 growth forecast was encouraging in the face of the current risks posed by the Eurozone economic crisis, and represented a more moderate growth trend for the industry.

BBS president Andreas Kern highlighted an increase in new housing orders that was likely to benefit building material sectors such as plaster, masonry, insulation, tiles and mortar.

"Given many years of decline in housing, the current observed increase in new starts is long overdue," Mr Kern said. He added that previous reluctance to invest in this area has led to bottlenecks in the supply of housing, with over 100,000 homes currently needed in metropolitan areas.

The building materials industry in Germany is also expected to be boosted by a small increase in activity of up to 1% in commercial construction.

Offsetting these positive trends, the BBS said public construction was forecast to see a further decline in investments because of austerity measures. Nevertheless, it said the increase in funding to €1.5 billion per year for the German government's CO2 Building Rehabilitation Programme - which aims to stimulate energy-efficiency in the building sector - was a step in the right direction.