Roland Berger Construction Radar 2026

By Kai-Stefan Schober

After bottoming out in 2025, things are beginning to look up in the construction industry. Our latest Construction Radar shows that many indicators are set to return to positive territory, thanks largely to the rollout of Germany’s massive new infrastructure fund. We look at which sectors are performing best, where the fund’s impact will be felt and the most promising profitability levers.

Following several years of decline, the German construction industry is forecast to stabilize in 2026 and move into growth territory in 2027, according to Roland Berger’s latest industry assessment. Our annual Construction Radar predicts growth of around 2.0% per year between 2026 and 2028, with new-build civil engineering as the strongest growth driver.

The forecast is built on the back of measurements of numerous key industry indicators and fundamentals, many of which are expected to turn positive in 2026 or 2027 for the first time in several years. The announcement of Germany’s EUR 500 billion infrastructure and climate fund is a major factor behind the expected recovery, according to the report.

The latest edition of the radar, available to download on this page, presents the findings for each indicator, from business sentiment to construction permits awarded, offering analysis and forecasts across industry segments. It also provides a valuable assessment of the new infrastructure fund and its likely impact, before evaluating profitability levers across the value chain.

Positive but subdued

While the construction industry remained in crisis in 2025, with the market continuing to shrink, the radar suggests that the low point has been reached. The market is expected to stabilize in 2026, albeit at a low level, with even the new residential segment – the key driver of the construction crisis in recent years – showing improvement. The recovery is forecast to gather real pace from 2027, supported by strong growth in the new civil engineering and new residential construction segments.

Key market indicators show slight improvements rather than sharp upturns. For example, while the ifo Business Climate Index for the industry remains stuck in negative territory, it has entered a recovery phase. Interest rates for construction loans have also stabilized.

Most industry fundamentals recovered well between 2024 and 2025. Order income in Q1-Q3 2025 rose by more than 10% in the residential segment and around 8% in the non-residential segment, with order backlogs also rising. Residential sales, however, fell. The civil engineering segment recorded steady growth in all three metrics (order income, sales and backlog).

While costs increased in the residential and non-residential segments in 2025, a rise in building permits issued in the residential segment indicates growth recovery in 2026.

A boost for German construction

The radar forecasts that Germany’s Special Fund for Infrastructure and Climate (SVIK) will provide a significant growth boost to the construction industry. Of the EUR 500 bn total, Roland Berger estimates that EUR 160-210 bn (32-42%) will be allocated to public construction and infrastructure across three key areas: states & municipalities (schools, roads, etc.); sustainability & climate (energy efficiency, building renovations, etc.); and federal projects (railways, energy infrastructure, etc.).

Its impact has so far been limited as material funds will be dispersed gradually from 2026. But the civil engineering segment is expected to be the main beneficiary, likely receiving 70% of the construction allocation (EUR 112-147 bn).

An analysis of key performance indicators in the radar suggests the SVIK’s spending boost cannot come soon enough. The study shows that selected large companies across the construction value chain saw a fall in net income and revenues in 2024 compared to 2023, with year-on-year net income dropping by -26% in the building products industry group. However, some more agile companies have adapted quickly to the volatile construction market. This was particularly apparent in the project development and real estate investment holding group, where net income rose by 57%. However, this follows a torrid 2022-2023 period in which the group faced a sharp decline. Overall, the trend of both metrics remains negative with little sign of recovery.

The report ends with an assessment of the levers that have the most potential to tackle particular challenges and drive profitability for players from each step of the value chain. Commercial excellence and procurement excellence were found to be the most universally relevant levers. But more specifically, many nuances and dependencies exist that mean growth strategies must be tailored to individual companies.

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