EXPO REAL 2026: DIW Warns of Declining Construction Productivity

<p>The German construction industry faces a paradox: while construction volume is expected to grow noticeably for the first time since 2020 after years of stagnation, a new DIW analysis reveals a structural problem that has plagued the entire industry for decades – weak construction productivity. For specialist visitors to upcoming industry events such as the German Housing Construction Congress in Berlin or EXPO REAL in Munich, this topic is likely to be one of the central discussion points of the year.</p>

<h2>A Turnaround in Construction: Growth After Years of Decline</h2> <p>According to the latest construction volume calculations by the German Institute for Economic Research (DIW Berlin), published in DIW Weekly Report 1+2 2026, the German construction industry faces a trend reversal. After years of declining construction performance, construction volume is expected to grow again in 2026 for the first time since 2020 – by 1.7 percent. For 2027, researchers expect an increase of 3.4 percent. The main driver of this development is public civil engineering, but residential construction is also picking up again: after a decline of 6.4 percent in 2025, an increase of 2.4 percent is expected for 2026, and even 6.1 percent for 2027.</p> <p>These figures are an important signal for the industry after a long period of stagnation. Public investment acts as a catalyst – a topic that is likely to be at the center of the German Housing Construction Congress on May 19, 2026 in Berlin, where funding concepts and land mobilization will be discussed.</p>

<h2>The Productivity Problem Since 1991</h2> <p>However, DIW researchers dampen enthusiasm: productivity in the construction sector has declined significantly since 1991 – a finding that has accompanied the entire industry for more than three decades. Study author Martin Gornig, Research Director for Industrial Policy at DIW Berlin, warns: <strong>"While the development of the construction industry is encouraging, there is no reason to give the all-clear yet. Productivity in construction has recently declined significantly. Should the many investments cause highly specialized construction firms to reach their capacity limits, this could fuel price increases again – and slow down momentum."</strong></p> <p>In order for public investment not to be absorbed by rising prices, construction industry productivity must urgently be improved – for example through targeted initiatives by politicians and businesses. Researchers specifically propose a task force to coordinate public investment, in which different levels of government should work together. For trade fairs like EXPO REAL, Europe's largest B2B platform for real estate and investment, taking place from October 5-7, 2026 in Munich, this opens up an obvious focus topic: How can more living space be created with limited capacity?</p>

<h2>Living Space in Transition: From 69 to 94 Square Meters</h2> <p>Another aspect of the DIW study concerns the development of residential space in Germany. Since 1965, apartments have become significantly larger on average: from 69 square meters with 4 rooms and 2.7 inhabitants in 1965 to 94 square meters with 4.4 rooms and an average of only 2 inhabitants in 2024 – an increase of 25 square meters. If construction numbers, depreciation rates, and residential space trends remain constant as in 2024, DIW Berlin forecasts another reduction to an average of 88.5 square meters per apartment by 2050.</p> <p>Interesting is a countertrend within the market: new single-family homes tend to become increasingly larger, while apartments in multi-family homes become smaller. Since the beginning of the 21st century, researchers have observed internationally that in many countries fewer large apartments and more small apartments are being built – a trend that is likely to be relevant for German construction companies and project developers, who must adapt their product portfolios accordingly.</p>

<h2>Relevance for 2026 Construction Trade Fairs</h2> <p>The current DIW data thus provide important discussion material for the numerous trade fairs and industry events of 2026. In addition to the German Housing Construction Congress and EXPO REAL, events such as glasstec in Düsseldorf (October 20-23) with its focus on energy-efficient facade technology or GET Nord in Hamburg (November 19-21) with its focus on building services are likely to indirectly benefit from the productivity and space trends described. After all, all these topics ultimately concern the same question: How can the construction industry build more and at the same time more efficiently despite structural challenges?</p>

<h2>Conclusion and Outlook</h2> <p>The DIW analysis paints a nuanced picture of the German construction industry: on the one hand, signs of an economic recovery are increasing, driven by public investment and a recovering residential construction sector. On the other hand, productivity, which has been declining since 1991, remains an unresolved structural problem that could diminish the positive effects of the investment initiative. For exhibitors, planners, and investors exchanging ideas in the coming months at the German Housing Construction Congress, EXPO REAL, or other industry meetings, the central message is likely to be: growth alone is not enough – without productivity increases, the urgently needed living space will remain expensive and scarce.</p>