Germany: stable market growth forecast

Latest forecasts for the German cement industry show that the market is expected to remain stable this year, underpinned by growth in the residential market.

Boosted by a continued progress of the overall economy, the German Cement Works Association (VDZ), has said that the relatively high level of cement consumption achieved in 2011 is set to be repeated again this year.

After growth in all market segments, domestic cement demand last year reached 28Mt, a 13 per cent YoY  advance (2010: 24.7Mt). Cement and clinker exports were also 10 per cent higher over the same period of last year and slightly under the volumes achieved in 2008. Total German cement production was approximately 33.8Mt, slightly above pre-crisis levels of 33.6Mt registered in 2008. Imports were around 1.2Mt, approximately the same level as last year.

In terms of the construction market, the housing segment accounted for the largest amount of cement usage in Germany thanks to low interest rates and the approval of housing development. In terms of own-homes and apartment building, the increase in cement demand for that sub-sector was 18 per cent.  A further improvement in this sector is expected in 2012 with 200,000 completions estimated for this year. Cement demand for apartments is expected to rise 20 per cent in 2012. In non-residential construction, a clear recovery in permits issues has led to an increase in cement demand growth in that segment of about 18 per cent in 2011.

The civil engineering area is expected to be more subdued compared to other segments. Despite the removal of stimulus packages, a growth rate of 1.5 per cent was still recorded. However, financing for civil engineering still remains a risk and therefore the section is expected to develop at about the same level as last year.