Abstract
In December 2008, the European Central Bank (ECB) announced a two-and-a-half
year delay in the new
EUR500mn (US$675mn) headquarters it was constructing
in Frankfurt. Tenders are expected to be issued
in mid-2009 and the final
green light for the project should be given in December this year.
Originally,
the headquarters building was scheduled to be completed by
2011, but these latest delays will push the
finishing date for the project
back to mid-2014.
In October 2008, it was reported that a number of
coal-fired power plants on the drawing board would be
facing increased
scrutiny owing to the credit crunch. Currently, Germany has 16 projects
planned for
construction through to 2012. These projects would add another
18,000 megawatts (MW) to the country’s
transmission grid. Five of
the projects are undergoing construction. However, the other 11 projects, with
a
total capacity of 11,000MW, are still seeking funding.
Given mature
public infrastructure and sluggish activity in key private sectors, the growth
outlook for
Germany' s construction industry was already poor even before
the global financial crisis kicked in earnest
during Q308. The subsequent
global economic downturn makes the prognosis bleaker still. One of the
few
bright spots, the commercial construction sector, has seen activity take a
nosedive. Against this
backdrop, we have further downwardly revised our
forecasts. Indeed, we now expect Germany' s
construction sector to contract
by 2% in real terms during 2009, compared with our earlier forecast of
1.3% growth.
Risks to our forecasts are largely to the downside,
particularly for 2010. At present, we anticipate that
economic growth in
major economies will begin to bounce back next year; however, this is by no
means
guaranteed. A prolonged recession in the US and Europe would weigh
on economic growth and
infrastructure activity in Germany beyond the next
year, with continued negative implications for
commercial construction and
industrial construction in Germany' s heavily export-dependent economy.
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