BERLIN (dpa-AFX) - The construction industry has revised its business expectations for the current year downwards. The industry is now expecting sales to fall by four percent instead of the previous 3.5 percent, as the Federation of the German Construction Industry announced on Tuesday. The main reason for this is the expectation that the federal, state and local governments will reduce their investments in public construction projects this year due to the expected lower tax revenues.

The association emphasized that investments are particularly important now. In a commissioned report for the industry, the German Economic Institute (IW Koln), which is close to employers, assumes that spending on housing construction alone would have to increase by around 20 billion euros each year after adjusting for inflation, measured against the level of 2022. This is the only way that around 350,000 apartments could be built each year. According to the report, this is how many new apartments would have to be built every year until 2030 to meet demand.

However, the industry is a long way from achieving such figures. There is also currently no end in sight to the decline in the number of approvals, emphasized construction industry president Peter Hübner.

The institute also sees an increased need for investment in federal highways and freeways. "Without an improvement in infrastructure, Germany's competitive situation cannot be improved, and without more investment in existing buildings, climate protection targets cannot be achieved," said IW study author Michael Voigtländer on Tuesday.

Hübner criticized excessive bureaucracy in particular as a major hurdle for the industry. "No industry is as thoroughly regulated as construction: the picture is characterized by diverse and constantly new government regulations, outdated rules and barely digitized public administrations," he said. This is where politics should come in./maa/DP/stw