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German construction prices have soared in recent years. It was only in the course of the Corona pandemic 2020 and the associated macroeconomic slump that the price increase lost some momentum. Scarce production capacities in the construction sector and the recent surge in material prices, however, feed expectations that construction prices may start rising faster again. Against this background, the research project develops a forecasting model that is capable of generating medium-term forecasts of construction prices in Germany of up to five years. The forecasts can be updated multiple times per year. An estimate of forecast uncertainty is also given.
German construction prices have soared in recent years. In 2018 and 2019, the prices for construction work increased at 4½ percent compared to the previous year. It was only in the course of the Corona pandemic 2020 and the associated macroeconomic slump that the price increase lost its momentum. However, high capacity utilisation in the construction industry of 78% in 2020 feeds the expectation that the strong increase in the prices for construction work will continue after overcoming the pandemic.
The research project investigates whether it is possible to forecast prices for construction work over a medium-term period of five years, which data and methods can be used, and how the long forecast horizon is related to forecast uncertainty. The findings are used to create forecasts of construction prices up to the year 2025.
Contractor of the project was Kiel Economics Research & Forecasting GmbH & Co. KG, Kiel.
Stefan Rein
Federal Institute for Research on Building, Urban Affairs and Spatial Development
Division WB 4 "Digital Transformation of the Construction Industry"
Phone: +49 228 99401-1349
Email:
stefan.rein@bbr.bund.de