Construction

Construction

Building on Solid Ground

Industry Overview

The construction sector in Germany is one of the country's most important economic sectors. The industry provides jobs to approximately 2.4 million people. With a share of more than one fifth, the German construction sector is the largest in the EU-28 in terms of building investments.

The building trades have a long tradition and play an important role in developing innovative services. This is one of the reasons why Germany is among the world's leading exporters of construction and planning services.

The industry is closely connected to the building material and machine manufacturer sectors. In March 2009, professional and industrial organizations, trade unions and government agreed on guiding principles for the future development of the German construction industry.

Our Industry in Numbers

  • N°1 European construction market with a market share of more than one fifth in terms of building investments.
  • Total volume of building investments was around 280 billion Euros in 2013.
  • In 2013, construction accounted for 50 percent of gross fixed capital formation.
  • According to the Federal Statistical Office, there are about 2.4 million qualified employed and independent workers (2013) as well as 392,000 established construction companies (2012).

Market Potential

The German Construction Federation (ZDB) projects a nominal revenue growth of 3,5 percent for the construction industry as a whole in 2014. Employment in the industry is expected to increase by 1%.

Especially optimistic were the expectations for developments in the housing sector. Based on rising incomes, high employment levels, and historically low interest rates, ZDB analysts anticipate that revenues in the market for new housing units will increase by around 5% to 35,3 billion Euros. This implies the completion of 250.000 homes.

Gross receipts from the public sector will experience average growth: +3,5% to 28,1 billion Euros. Compared to previous years, the outlook for commercial construction is improving. Thus, builders were aiming at a sales volume of 35,3 billion Euros in 2014 (+2,5%).

Market Access

Offering construction services to the German market mainly depends on acquiring a license to do business in the construction related profession . In addition, specific regulations assure lasting quality and fair competitive conditions.

PROFESSIONAL QUALIFICATIONS - Many professions in the construction sector involve regulated skilled crafts, and for their practice a master craftsman diploma or an equivalent qualification level is required. Similar restrictions apply to architects and consulting engineers. It may also be necessary to notify the appropriate professional chamber/s before starting business operations in Germany. More information is available in our section "Service Occupations."

MINIMUM WORKING CONDITIONS - Enterprises from other EU member states intending to send construction workers to Germany have to make sure that the underlying employment contracts comply with certain minimum working conditions such as minimum wages. Information about the statutory working conditions for deployed foreign workers can be found on the website of the German Customs Administration.

OCCUPATIONAL SAFETY - Construction sites must comply with safety standards as described in the German Construction Site Regulations Ordinance (Baustellenverordnung) which implement related EU directives. Further information is available on the website of the Federal Institute for Occupational Safety and Health (Bundesanstalt für Arbeitsschutz und Arbeitsmedizin).

TAX WITHHOLDING - Foreign enterprises that offer construction services in Germany should be aware of the tax withholding tax procedure governing B2B contracts. According to the Illegal Employment in Construction Act, contractors are obligated to withhold a tax in the amount of 15 percent from the agreed total remuneration (consideration). However, foreign service providers may apply for a tax refund or an exemption. Detailed information and individual support are available at the Tax Information Center of the Federal Central Tax Office. On its website, a comprehensive leaflet on the topic is available for download.

PRODUCT CONTACT POINT FOR CONSTRUCTION - Complying with EU law, Germany has established a Product Contact Point for Construction in order to facilitate the free movement of goods in the building sector. The Product Contact Points' task is to provide EU service companies with information on rules applicable to the incorporation, assembling or installation of a specific type of construction product. The German Product Contact Point for Construction is located at the Federal Institute for Materials Research and Testing (BAM).

POINTS OF SINGLE CONTACT - Service providers from EU member states may turn to their local Point of Single Contact (PSC). PSCs, located in each federal state, are designed to facilitate administrative procedures when entering the German market. More information is available in our section ''EU Service Market.''

Finding Providers

Due to their long tradition and the highly innovative power German consulting and construction businesses are among the world's leading exporters. The following internet sources may be helpful in finding appropriate service providers.

A database with information about German architects doing business in an international context is available on the website of the Network for Architecture Exchange (NAX). The NAX is an initiative of the German Federal Chamber of Architects (Bundesarchitektenkammer - BAK).

The German Association of Consulting Engineers (Verband Beratender Ingenieure - VBI) provides on its website an online database of consulting engineers in the construction field. In addition, the online register of the German Federal Chamber of Engineers (Bundesingenieurkammer - BIngK) may be browsed to verify whether engineers are officially enrolled.

Many regional member associations of the German Construction Industry Federation (Die Deutsche Bauindustrie), the German Confederation of Skilled Crafts (Zentralverband des Deutschen Handwerks), or the German Construction Confederation (Zentralverband Deutschen Baugewerbes) provide databases or lists containing businesses offering construction services. However, this information is mainly available in German.

Entrepreneurs who are looking for a specific business contact in the construction industry may publish their inquiry free of charge in the iXPOS Export Community. Our Business Community enables both German and foreign companies from all economic sectors to advertise their products and services as well as to search for the products and services they need. In addition, the iXPOS Export Community offers companies and entrepreneurs the possibility to create their own profile, participate in the forum, find business contacts as well as communicate and interact with all registered members

Supporting Institutions

PLANNING & ARCHITECTURE - The Federal Chamber of German Architects (BAK) is the professional organization that represents architects in Germany. Membership is mandatory. The chamber provides comprehensive information about architecture in Germany on the website of the NetworkforAEE (NAX). The Federal Chamber of Engineers of Germany (BIngK) is likewise responsible for consulting engineers in Germany.

BUILDING INDUSTRY - The German Construction Industry Federation (HDB) represents the interests of industrial building companies. (German only)

BUILDING TRADE - The German Construction Confederation (ZDB) supports and represents the interests of the German skilled craft businesses in the construction sector. Most of the building trade professionals are mandatorily organized in the Chambers of Skilled Trades and Crafts. They are represented on the national level by the German Confederation of Skilled Crafts (ZDH).

BUILDING MATERIALS INDUSTRY - Further information on the construction materials and machine manufacturer branches can be found on the website of the German Engineering Federation (VDMA) and the German Building Materials Association (BBSE). For more detailed information on the machinery sector, please refer to our relevant section "Business Sectors."