PRESS RELEASE BY MBD...

GERMAN CONSTRUCTION MARKET RESEARCH REPORT

RELEASED: OCTOBER 2005

After researching the German construction market development and taking into account various other factors the following conclusions can be drawn from MBD's report:

MARKET REVIEW 2000-2004:

By far the largest construction market in Europe is found in Germany, which is estimated to have accounted for some 21% of output in 2004, with a value of nearly £136 billion.

The construction activity per capita in the east of Germany is still some 10% lower than in the west and this part of the country is still suffering from oversupply of poorly built basic housing. With an increasingly ageing population, Germany’s housing sector is, however, expected to start its recovery within near future, with plans to introduce real-estate investment trusts, similar to those which already exist in France

MARKET FORECAST 2005-2009:

The rigidities in the German economy, particularly the labour market, tend to slow somewhat the recovery anticipated to occur in the country during the next few years. Furthermore, the cost of the reunification continues to have an adverse effect on the country’s economic development. However, the German construction market is still anticipated to remain by far the largest in Europe, albeit claiming a considerably lower proportion of the total European investment than in the early 1990s, when the market was boosted by the positive effects of reunification in the country.

Conditions are expected to improve in all sectors of the market, with private non-residential building, together with civil engineering and house building sectors in particular anticipated to be revived during the next few years. In the east of the country, there is still a significant amount of housing repair and maintenance work to be done, which will help maintain relatively steady growth in the market, albeit this sector is expected to decline towards the end of the forecast period. Germany is expected to account for some 21% of the total European market throughout much of the forecast period, rising to 22% in 2009

NOTE TO EDITORS:

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