Introduction — Status of the Building Materials Industry 2026
The DACH building materials industry is undergoing a phase of cautious stabilization in 2026 after three years of profound crisis. Following the massive collapse in residential construction production in 2023 and 2024, as well as a sustained sales crisis in nearly all construction-related segments, a calendar-adjusted production growth of 1.2 percent is being observed for the first time (Federal Statistical Office, Q4 2025). The Federal Association of Building Materials – Stones and Earths (BBS) speaks of a "first sign of upturn," but warns against premature optimism.
Structural pressures remain significant: Sharply increased energy costs, volatile raw material prices, an insolvency wave among small and medium-sized construction companies, and a lack of political planning certainty characterize the operational environment. At the same time, massive infrastructure investments by the federal government and states – particularly in road and rail construction and water/wastewater management – are stabilizing demand for mineral building materials, reinforced concrete, and asphalt.
The Central Association of German Construction (ZDB) forecasts real sales growth of 2.5 percent across all construction segments for 2026. The Main Association of the German Construction Industry (HDB) confirms this assessment but emphasizes a clear division of the market: While commercial building and civil engineering are growing, residential construction remains at low levels with only marginal signs of recovery. The building materials industry must prepare for a "two-speed scenario" requiring different production strategies and capacity planning depending on the segment.
Leading manufacturers such as Heidelberg Materials, Holcim, Wienerberger, Knauf, and Rockwool are responding with portfolio adjustments, selective plant closures, and increased focus on energy-efficient building materials and CO₂-reduced concrete. At the same time, the industry is driving consolidation processes: Joint ventures, stakes, and M&A activities characterize 2026 more strongly than in the previous two years.
Residential Construction Crisis: Permits, Completions, Cancellations
Residential construction remains the central burden factor for the building materials industry in 2026. Building permits reached approximately 215,000 dwelling units (WE) in 2024, the lowest level since 2012. For 2025, statistical offices expect only a slight increase to about 230,000 WE – far from the political goal of 400,000 new dwellings annually. Actual completions are even lower: In 2025, only approximately 185,000 WE were completed, with the ZDB expecting a maximum of 200,000 WE for 2026.
Particularly problematic is the cancellation rate: Approximately 18 percent of projects permitted in 2023 and 2024 were not realized or postponed indefinitely. Reasons include increased construction costs (on average +22 percent compared to 2021), higher financing costs despite slightly declining interest rates, and stricter energy efficiency requirements. The temporary reintroduction of EH55 funding (Efficiency House 55) with KfW grants of up to 112,500 euros per dwelling unit since January 2026 provides initial stimulus, but its effects are delayed.
Demand for typical residential construction materials – masonry bricks, autoclaved aerated concrete, gypsum boards, mineral wool insulation, screeds – remains subdued accordingly. Wienerberger recorded a sales decline of minus 14 percent for backed bricks in the DACH region in 2025 compared to the previous year. Knauf reports capacity utilization of gypsum boards at only 68 percent, compared to 92 percent in normal market phases. Rockwool and other insulation manufacturers partially offset residential construction weakness through increased demand from the renovation sector, particularly roof renovations under the Building Energy Act (GEG).
Regional differences are evident: While urban densification areas such as Munich, Frankfurt, and Hamburg show stable, though reduced new construction activity, near-total stagnation is observed in peripheral and structurally weak regions. Austria shows a similar picture with a decline in building permits of 19 percent (2025 vs. 2022), while Switzerland is less affected due to more stable financing conditions.
Key Figures Residential Construction DACH 2024-2026
| Key Figure | 2024 | 2025 | 2026 (Forecast) | Change 2026/2024 |
|---|---|---|---|---|
| Building Permits DE (WE) | 215,000 | 230,000 | 255,000 | +18.6% |
| Completions DE (WE) | 182,000 | 185,000 | 200,000 | +9.9% |
| Cancellation Rate of Permitted Projects | 16.2% | 18.4% | 14.5% | -1.7 PP |
| Avg. Construction Costs (€/m² Living Space) | 2,780 | 2,850 | 2,920 | +5.0% |
| EH55 Funding Volume (Million €) | – | – | 1,850 | – |
| Building Permits AT (WE) | 44,200 | 46,800 | 51,000 | +15.4% |
| Building Permits CH (WE) | 38,600 | 39,100 | 41,200 | +6.7% |
Infrastructure and Civil Engineering as Stabilizing Anchors
In stark contrast to residential construction, infrastructure and civil engineering are stabilizing the building materials industry in 2026. The public sector is investing heavily in modernizing transportation networks, expanding rail infrastructure, and upgrading water structures. The Federal Transportation Master Plan 2030 provides for investments of over 270 billion euros by 2030, with 42 billion euros alone for 2026. This is supplemented by state funds and municipal investments in road, sewer, and bridge construction.
Demand for mineral building materials for civil engineering – particularly ready-mixed concrete, asphalt, gravel, sand, and aggregate – shows clear growth in 2026. The Federal Association of the German Ready-Mixed Concrete Industry reports a production volume of 8.2 million m³ for Q1 2026, an increase of 6.8 percent compared to the previous year's quarter. Heidelberg Materials and Holcim report near-full capacity utilization of their ready-mixed concrete plants in infrastructure-related regions, particularly in North Rhine-Westphalia, Bavaria, and Baden-Württemberg.
Structural steel also benefits: Major projects such as the replacement of the Rahmedetalbrücke (A45), the renovation of the Levensauer High Bridge, and numerous bridge modernizations in the federal road network drive demand for construction steel and reinforcing steel. SSAB and Salzgitter report a stable order situation with delivery times of 14-18 weeks for structural steel profiles S355 and S460.
The ZDB forecasts real sales growth of 3.8 percent for 2026 for non-residential construction – which also includes commercial and industrial building. Logistics construction (warehouses, distribution centers) and the expansion of data centers and production facilities for semiconductor and battery technology are developing particularly strongly. These segments require high-strength concrete (C50/60 to C90/105), special screeds with load classes up to 10,000 N, and system-tested fire protection cladding.
Civil Engineering Segments and Material Intensity 2026
| Segment | Investment Volume (Billion €) | Primary Building Materials | Growth 2026/2025 |
|---|---|---|---|
| Road Construction (Federal/State) | 18.4 | Asphalt, Ready-Mixed Concrete, Gravel | +4.2% |
| Rail Construction | 14.8 | Concrete Sleepers, Gravel, Steel | +7.1% |
| Bridge Construction | 8.6 | High-Performance Concrete, Structural Steel, Prestressing Steel | +5.9% |
| Sewer/Water Construction | 6.2 | Reinforced Concrete Pipes, Sealants | +3.4% |
| Logistics Construction | 4.9 | Ready-Mixed Concrete, Trapezoidal Sheet, Insulation | +8.7% |
Insolvency Dynamics 2024-2026 in the Construction Industry
The insolvency wave in the construction industry reached its provisional peak in 2024. The Federal Statistical Office recorded a total of 3,840 business insolvencies in construction trades in 2024 – an increase of 28 percent compared to 2023. Creditors' claims totaled 4.2 billion euros. Small and medium-sized construction companies with 20-250 employees were particularly affected, having to file for insolvency due to project losses, change order disputes, and liquidity bottlenecks.
For 2025, a slight easing is evident: The IWH Insolvency Trend Barometer reports a decline of 8 percent for Q1 2025 compared to Q4 2024, but still 4 percent more than the previous year's quarter. January 2026 is 4.9 percent above January 2025, indicating an ongoing tense situation. Coface and Allianz Trade forecast a stabilization at high levels for 2026 with 3,600-3,800 insolvencies in the construction sector.
Insolvency risks have a direct impact on the building materials industry: Receivables losses, necessary write-downs, and stricter credit reviews lead to more restrictive delivery terms. Many building materials manufacturers have shortened their payment terms (14 days net instead of 30 days), demand advance payments, or work with credit insurance. Wienerberger reports an increase in provisions for doubtful receivables of 40 percent in the 2025 financial year.
Regionally, Austria shows a similar pattern: Approximately 6,600 business insolvencies were registered in 2025, with a slight decline to 6,400 cases expected for 2026. Switzerland remains less severely affected due to more stable financing structures and a more restrictive insolvency law.
Consolidation: M&A, Stakes, Joint Ventures
The crisis is accelerating consolidation processes in the building materials industry. 2026 is characterized by strategic mergers, acquisitions, and joint ventures with which manufacturers respond to overcapacity, margin pressure, and transformation requirements. M&A activity in the DACH building materials sector reaches an estimated transaction volume of 3.8 billion euros in 2026, the highest value since 2018.
Heidelberg Materials continued the disposal of peripheral areas in 2025 and is focusing on CO₂-reduced cement and integrated concrete solutions. The acquisition of a small and medium-sized recycled concrete specialist in Baden-Württemberg strengthens the position in circular construction. Holcim is consolidating its DACH activities and plans the closure of three smaller cement plants while simultaneously expanding the most modern facilities with CCS readiness (Carbon Capture and Storage).
Knauf expands its insulation and drywall portfolio through stakes in a manufacturer of wood fiber insulation boards to meet increasing demand for biogenic insulation materials. Rockwool is investing in joint ventures in the field of fire protection system solutions, particularly for multi-story timber buildings, which are becoming increasingly permissible due to changes in state building codes.
In the steel sector, SSAB and Salzgitter are exploring closer collaboration on green hydrogen steel. Both companies are developing direct reduction facilities and want to leverage synergies in procurement and distribution. The transformation to CO₂-neutral steel requires investments of over 30 billion euros alone in the DACH region by 2045 – a volume that makes cooperation attractive.
The timber construction sector is also experiencing consolidation: Stora Enso and Steico are bundling their CLT production capacity (Cross Laminated Timber) and creating joint distribution structures for multi-story timber construction. The increasing demand for solid timber components – driven by ESG requirements and timber construction initiatives of the states – justifies larger, highly automated production units.
Significant M&A and Cooperation Projects 2025-2026
| Transaction | Company | Segment | Volume (Million €) | Status |
|---|---|---|---|---|
| Acquisition Recycled Concrete Specialist | Heidelberg Materials | Concrete/Recycling | 185 | Completed Q4 2025 |
| Wood Fiber Insulation Stake | Knauf | Insulation | 120 | Completed Q1 2026 |
| JV Fire Protection Systems | Rockwool + Partner | Fire Protection | 95 | In Preparation |
| CLT Production Bundling | Stora Enso + Steico | Timber Construction | 220 | Completed Q2 2026 |
| H2 Steel Cooperation | SSAB + Salzgitter | Steel | – | MoU Signed |
Manufacturer Response: Plant Closures, Short-Time Work, Diversification
In 2026, building materials manufacturers are responding to the changed market situation with a package of capacity adjustment, cost reduction, and portfolio expansion. Plant closures, short-time work, and diversification into growing segments characterize corporate strategy.
Heidelberg Materials announced the closure of two older cement plants in Germany at the end of 2025, which together represent a capacity of 1.8 million tons of cement annually. Production is being shifted to more modern, energy-efficient facilities with lower CO₂ factors. At the same time, the company is investing 450 million euros in the modernization of the Burglengenfeld cement plant with connection to a planned CO₂ capture facility.
Wienerberger reduced production in three brick plants in Germany and Austria by an average of 35 percent in 2025 and temporarily introduced short-time work. In parallel, the group is expanding its offering of pre-assembled facade systems and integrated ventilation/insulation solutions to position itself as a system provider and achieve higher margins.
Knauf is keeping its production capacity largely stable but is optimizing utilization through more flexible shift models and energy-optimized firing schedules. The company is increasingly investing in digital sales channels and BIM product data (Building Information Modeling) to facilitate the specification of its products in planning processes and secure market shares.
Rockwool is focusing on premium segments: High-temperature insulation for industrial facilities, fire protection certifications according to EN 13501-1 (Euroclass A1), and acoustically optimized systems for dense urban development. Diversification away from standard residential construction toward more technically demanding applications stabilizes prices and margins.
In the steel sector, SSAB and Salzgitter are reducing production of long products (reinforcing steel) but maintaining capacity for high-strength structural steels (S460, S690). The transformation to green steel via hydrogen direct reduction requires massive investments but is regarded as strategically essential. SSAB plans to offer completely fossil-free produced structural steel from 2028 – a unique selling point in the DACH market.
Energy Costs and Supply Chains 2026
Energy costs remain a decisive cost factor for the energy-intensive building materials industry in 2026. After price peaks in 2022 and partial easing in 2023-2024, electricity prices stabilize at a level of 12-15 cents/kWh for industrial large consumers (excluding taxes/levies), compared to 6-8 cents before the energy crisis. Natural gas costs on average 35-42 €/MWh, significantly above the long-term average of 20 €/MWh.
The cement industry is particularly affected: A cement plant requires approximately 3,000-3,600 MJ of thermal energy per ton of clinker plus about 100-110 kWh of electrical energy. At current prices, this corresponds to energy costs of 35-45 € per ton of clinker, compared to 18-22 € before the crisis. Heidelberg Materials and Holcim are responding with increased use of alternative fuels (replacement fuels from waste, biomass) and investments in waste heat recovery.
The glass industry – relevant for facade glazing and insulating glass – is struggling with similar challenges. Melting furnaces require continuously high temperatures of 1,500-1,600 °C, requiring natural gas or electric heating. Several flat glass production lines in Germany were permanently closed in 2024-2025, with imports from Eastern Europe and China increasing.
Supply chains have largely normalized in 2026. The extreme disruptions of the pandemic years have been overcome, though point shortages persist for certain specialized components: Steel reinforcement for prefabricated parts (delivery time 14-18 weeks), high-quality EPDM sealing sheets (10-12 weeks), and technical insulation materials with lambda values below 0.030 W/(m·K) (8-10 weeks). Dependence on Chinese raw materials – particularly graphite for insulation and rare earths for catalysts – remains a strategic challenge.
Energy Cost Structure of Selected Building Materials 2026
| Building Material | Energy Requirement (MJ/t or kWh/m³) | Energy Costs (€/t or €/m³) | Share of Manufacturing Costs |
|---|---|---|---|
| Cement Clinker | 3,200 MJ/t + 105 kWh/t | 38-44 €/t | 42-48% |
| Flat Glass | 6,500 MJ/t | 68-82 €/t | 38-44% |
| Masonry Brick | 1,800 MJ/t + 45 kWh/t | 22-28 €/t | 28-34% |
| Stone Wool Insulation | 2,400 MJ/t + 180 kWh/t | 32-39 €/t | 24-30% |
| Structural Steel (Electric Arc) | 550 kWh/t | 66-82 €/t | 18-24% |
| Autoclaved Aerated Concrete | 680 MJ/m³ + 95 kWh/m³ | 9.2-11.8 €/m³ | 22-28% |
Funding Programs and Economic Support
In 2026, the government is increasingly relying on funding programs to stabilize the construction industry and thus building materials demand. The most important measures:
Residential Construction Funding: The temporary reintroduction of KfW funding for Efficiency House 55 (EH55) in new construction from January 2026 provides grants of up to 112,500 € per dwelling unit (15% of a maximum of 750,000 € eligible costs when certified with "Quality Seal Sustainable Building Plus"). The funding is initially limited to December 2027 and equipped with a total volume of 4.5 billion euros. By March 2026, 16,400 applications had already been filed – an indication of latent demand.
Climate-Friendly New Construction (KFN): The KfN program funds new residential building construction with life cycle assessment and CO₂ limits. Maximum funding: 150,000 € per dwelling unit when falling below the threshold of 24 kg CO₂ equivalent per m² living space per year (GWP value over 50-year use). This favors timber construction, recycled concrete, and CO₂-reduced cement – segments in which Stora Enso, Steico, and Heidelberg Materials are specifically investing.
Federal Funding for Efficient Buildings (BEG): Renovation funding continues unchanged with grants of up to 20% of renovation costs and interest-subsidized loans. The 2026 BEG budget is increased to 14.8 billion euros to raise the renovation rate from currently 1.0% to 1.4%. Beneficiaries are insulation manufacturers (Rockwool, Knauf, Steico) as well as window manufacturers and heating technology providers.
Infrastructure Special Asset: The 2026 federal budget includes 42 billion euros for transportation infrastructure, of which 18.4 billion for federal roads and motorways and 14.8 billion for rail routes. State funding of an estimated 12 billion euros is added. These funds flow directly into demand for ready-mixed concrete, asphalt, structural steel, and civil engineering structures.
Despite these measures, the ZDB criticizes the lack of long-term planning certainty. The temporary EH55 funding ends in 2027, with follow-up regulations unclear.
