The German construction industry experienced a severe setback in new business in July

Berlin. The German construction industry suffered a severe setback in terms of new business in July. Real (inflation-adjusted) new orders in the construction industry fell by 9.2 percent compared to the previous month, as the Federal Statistical Office announced on Friday. That was the biggest decline since October 2025, following two months of significant increases.

“The order books are getting thinner,” said the general manager of the Central Association of the German Construction Industry, Felix Pakleppa. "Companies are still working on what was ordered months ago. But the situation in the construction industry remains fragile."

Orders fell significantly in both building construction (8.4 percent) and civil engineering (10 percent). However, a three-month comparison, which is less prone to fluctuations, shows a different picture: from May to July, incoming orders were 2.7 percent higher than in the previous three months.

Housing construction is also not making progress. After a significant increase in the previous month, orders fell significantly again in July. Business associations are therefore calling for political reforms. “Housing subsidies are the cheapest way for the federal government to stimulate the economy,” said ZDB managing director Pakleppa. “Anyone who promotes home ownership relieves strained rental markets, strengthens the local economy and shows citizens that they take their concerns seriously.”

Despite the setback in new orders, construction companies' business was still going well in July. Real sales were 4.6 percent higher than in the same month last year. In nominal terms it rose by 9.4 percent to 12.1 billion euros. The number of employees in the construction industry also increased by 1.5 percent compared to the previous year to around 545,000 people. The data refers to companies with 20 or more employees.