German demand seen rising 6% in 2011

German demand seen rising 6% in 2011
Published: 31 May 2011

The German cement sector expects to register in increase in domestic consumption this year boosted by improvement in the economy and demand for construction services.

According to the German cement industry federation, BDZ, demand is expected to increase by nearly six per cent to 26Mt from 24.6Mt recorded last year. According to president of the BDZ, Andreas Kern,
the industry will also benefit from weather-related improvements compared to 2010.  For the first four months of the current year, sales have already advanced by 1.5Mt, up 28 per cent of the same period in 2010.

However, the trend in construction segments varies. A significant rise in residential building permits is expected in 2011, but this is against a low comparison base. Estimates show around 180,000 new dwellings are expected for 2011 against 169,400 last year. This segment accounts for more than of construction spending in Germany and an 8-12 per cent increase is forecast for this year.

Also starting from a low base is a recovery in non-residential construction. Gains of around nine per cent are expected. However, the outlook for the civil engineering sector remains bleak, mainly due to the financing of public works and an overall decline of two per cent is forecast for this year. Spending cutbacks continue to be a problem and in 2010 the share of spending on public works projects from the federal budget was just eight per cent compared to 13 per cent in 1998.