Economic uncertainty is creating challenges in the German construction industry and suppressing aggregate demand, but recovery may be on the horizon.
Things are tough in the German construction equipment and aggregates machinery and products markets. The VDMA, the country’s machinery and equipment manufacturers association, has reflected these challenging times with some stark numbers. German construction equipment sales are down 25% compared to last year, according to the association’s Construction – Equipment and Plant Engineering (VDMA Construction – EPE) department. Earthmoving equipment sales have dropped 30%, with heavy crawler excavator transactions the hardest hit. Here, sales are 40% below 2023 levels, says the same source, representing around 3,300 German and European mechanical and plant engineering companies.
“Rising construction costs and excessive bureaucracy in building regulations remain the biggest problems,” said a VDMA Construction – EPE spokesperson. “Despite lower interest rates, these aspects prevent a boost in construction activity. The industry expects a cautious forecast of 0% growth in 2025. Sustainability is a hot topic among manufacturers, both in terms of the machines themselves like decarbonisation, alternative drives, noise reduction, etc. – and the construction process, e.g., recycling and the circular economy. The construction equipment industry is working on concepts and technical solutions for implementation.”
The spokesperson said VDMA Construction – EPC expects to see many innovations at bauma, the latest triennial staging of the world’s biggest construction, quarrying, mining and recycling machinery trade fair, in Munich (7-13 April 2025).
Sonja Reimann is the press officer for Zeppelin Baumaschinen (Zeppelin), Caterpillar’s German dealership. She said the mood in the German construction industry is subdued due to economic uncertainty. “Residential construction is not progressing, but civil engineering is developing much better. Investment in infrastructure is lagging well behind expectations and demand. Like all industrial sectors, the construction industry faces change via digital and sustainable transformation. This forces customers to use construction machinery more efficiently and shapes investment behaviour.”
Reimann commented on how Zeppelin is helping its customers overcome their major challenges: “More than ever, it is important to extract raw materials sustainably, efficiently and safely. Zeppelin advises customers on choosing the right equipment that fulfils the industry’s requirements. They are looking for modern technologies that allow them to manage their machinery efficiently. VisionLink, for example, contributes to this. With fleet management, customers can monitor their machinery. This means that data such as fuel consumption and idle times are closely scrutinised, and, if necessary, appropriate measures are initiated.
“Like other industries, the quarrying industry is undergoing a transformation driven by digitalisation and sustainability. Considering that one litre of diesel corresponds to around 2.64 kilograms of CO2, it is crucial to significantly reduce fuel consumption – especially concerning the tonnes moved per hour. New machine technology can contribute to this. Another issue affecting the industry is the shortage of skilled labour. This is why work steps need to be automated. The first customers in Germany, including a quarry, are therefore using the Cat Command remote control for a Cat 395 crawler excavator and a Cat D6 XE dozer. Zeppelin supports customers in the implementation of new technology.”
Reimann said German raw materials companies can switch to another transitional technology to make their machinery more sustainable. “Oil from renewable or recycled raw materials plays a role, and it is found in alternative fuels such as hydrogenated vegetable oils, also known as hydrotreated vegetable oils (HVOs). Cat construction machinery can be refuelled with these fuels on their own or as an additive to fossil diesel, provided their engines are based on EU Stage V. The advantages of these fuels are that they can reduce emissions of certain products such as soot and carbon monoxide as well as NOX emissions in certain engines.”
According to Aggregates Europe – UEPG (European Aggregates Association) figures, German aggregate production was 577 million tonnes in 2022. The three COVID-19 pandemic-impacted years still saw higher aggregate production in Germany (584 million tonnes in 2021, 599 million tonnes in 2020, and 580 million tonnes in 2019). The country is Europe’s second biggest aggregate producer after Russia, which produced 825 million tonnes in 2022. Europe’s third biggest national aggregate producer, France, produced 383 million tonnes in 2022. In 2022, Germany had 1,435 aggregate producers (companies) working at 2,728 extraction sites. The country was Europe’s biggest recycled aggregates producer, producing 80 million tonnes.
Tamara Peterson, corporate communications specialist for Zeppelin Power Systems, the German dealer for Caterpillar engines, said current demand for aggregates in Germany is decreasing by about 30% to 50%, depending on region and customer. “The big challenge is the current customer and dealer inventory and the economic situation in Germany. Zeppelin helps the customer to find solutions to manage the inventory and future deliveries.”
Asked how Zeppelin Power Systems sees German aggregates market demand changing in the next year or two, Peterson responded: “It’s going to recover and come back to a normal level. The industry is waiting for the next government’s new economic programme.”
The Russia-Ukraine war has also had a major negative impact on Germany and its economy due to its traditional dependence on cheap energy sources from Russia. The almost complete suspension of their supplies shocked the entire German industrial sector, including its construction and aggregates segments. Since 2022, the industry has overcome the most negative consequences of the energy crisis and a sharp rise in inflation, but the current situation remains generally complex.
The German crisis has become a challenge for most of the nation’s local aggregates producers and global majors operating in the local market. One of those big players is the Swiss giant Holcim, a global leader in innovative and sustainable building materials, which traditionally had a strong presence in the German aggregates sector.
Earlier this year, Jewgeni Friedrich Müller, general manager of Holcim’s Aggregates business in North Germany (Region Nord), told Aggregates Business that the recent crisis years have tested Holcim’s resilience.
Region Nord remains one of Holcim’s largest aggregates divisions in Germany and the entire EU region. It currently consists of nine sand and gravel pits with a total production and handling capacity of approximately three million tonnes, five port terminals and two rail terminals. It supplies its products to major northern German cities such as Hamburg, Hanover, and Bremen.
According to Müller, the downturn in the German construction industry began in 2022 and got massively worse in 2023, especially among producers of building materials that supply residential construction.
He cites data from the German Federal Statistical Office showing that building materials production fell by 16.7% in 2023. Further figures showed that individual sectors even recorded up to 40% declines.
Müller says Holcim Region Nord and the wider German market have faced an oversupply of aggregates in recent years, mainly due to weak demand.
“Our customers in ready-mixed concrete and masonry construction are particularly suffering because the projects are delivered with delays or being partially cancelled.”
Müller says the industry’s potential recovery will come from stronger business in infrastructure projects. These include north-south power lines for green energy supply, LNG (liquified natural gas) terminals, industrial buildings such as EV (electric vehicle) battery plants, and semiconductor plant projects. Müller says that active participation in these projects allowed the company to stay afloat in a challenging environment.
A consortium of Cemex and Linde, a leading global industrial gases and engineering company, has been selected to receive €157 million in funding from the EU Innovation Fund for a pioneering CO2 capture project at Cemex’s Rüdersdorf cement plant in Germany.
The project, Cemex’s largest planned Carbon Capture Use and Storage (CCUS) project to date, aims to capture 1.3 million tonnes of CO2 per year from Rüdersdorf’s cement production, decarbonising the site by 2030.
“Our Future in Action climate action strategy is working hard to drive several revolutionary CCUS projects across our global operations,” said Sergio Menéndez, President of Cemex Europe, Middle East, Africa & Asia. “While we are working hard to decarbonise using existing technology (“reduce before capture”), an important component of our Future in Action strategy is to develop breakthrough decarbonisation solutions for our industry to reach Net Zero. This project is one of those tools. The Rüdersdorf project is Cemex’s largest CCUS project to date, with all the hallmarks and credentials to significantly contribute to the decarbonisation of the cement industry.”
At Rüdersdorf, Linde’s pioneering HISORP, CO2 capture technology will be deployed for the first time in a unique state-of-the-art cryogenic-adsorptive process that captures CO2 from the exhaust gas directly at the emission source. The raw CO2 is then compressed and liquefied to meet the purity requirements for subsequent sequestration. Finally, the liquid CO2 product will be transported by rail to an intermediate CO2 Hub and shipped to an offshore storage site in the North Sea for permanent storage.
The environmental credentials of this full-chain CCUS project at Rüdersdorf will be further enhanced and supported by the regional generation of green electricity and the recycling of water obtained from the condensation of exhaust gases.
CCUS is part of the roadmap for Future in Action, Cemex’s sustainability and decarbonisation program. The primary objective is to become a net-zero CO2 company by 2050. Since its launch in 2020, Future in Action has achieved record-breaking progress in reducing its carbon footprint.
Remaining with Cemex, the global building materials major has acquired a majority stake in RC-Baustoffe Berlin, a recycling company and part of the Heim Group, as part of its ongoing efforts to grow its circularity business.
RC-Baustoffe Berlin processes mineral construction, demolition, and excavation materials (CDEM). Its acquisition will integrate with Regenera, Cemex’s business that provides circularity solutions to extend the life cycle of construction products and materials through reuse in value-added products. The acquired recycling facility can process up to 400,000 tons of material per year, which Regenera will turn into repurposed aggregates for concrete production, reintroducing them into the construction value chain. In addition to its recycling capabilities, RC-Baustoffe Berlin operates Germany’s first plant to store biogenic CO₂ in recycled mineral waste permanently.
“The cement value chain is a valuable contributor to the circular economy, with concrete being an infinitely recyclable material,” said Fernando A. González, CEO of Cemex. “With acquisitions such as this, Cemex continues to strengthen its commitment to circularity through Regenera as well as promoting the world’s transition to a more circular economy. Construction and demolition waste accounts for more than 30% of global waste streams, and reintegrating these materials into the construction value chain can reduce the use of virgin raw materials.”
“We’ve been collaborating with Cemex on recycled aggregates for several years, and the company has consistently proven to be a reliable partner in the Berlin metropolitan market,” said Philipp Heim, managing partner of the HEIM Group. “Given its strong commitment to sustainability and the circular economy, Cemex is the perfect partner to guide RC-Baustoffe Berlin toward a successful future.”
Regenera recovered over 9 million tonnes of CDEM in 2023 and aims to recover over 14 million annually by 2030. Earlier this year, Cemex partnered with the Ellen MacArthur Foundation, the world’s leading circular economy network. This network works with ambitious, like-minded organisations globally to continue leveraging the potential of the cement value chain in circularity.
Global wet processing equipment giant CDE is helping its German customers comply with increasingly tight national environmental regulations.
Christoph Baier, CDE business development manager for DACH & Central Eastern Europe, said: “Regulations such as the Mantelverordnung, which regulates the production and use of mineral substitute building materials to protect soil and groundwater and promote the circular economy in construction, and the demand for eco-friendly solutions and reduced emissions are accelerating the shift towards recycled and secondary aggregates. The growing emphasis on the circular economy has significantly changed the aggregates and construction sectors’ landscapes, as businesses are expected to find innovative ways to recycle construction and demolition waste and utilise more eco-friendly materials.
“CDE offers advanced and complete mineral washing solutions that promote sustainability and efficiency for the recycling and quarrying sectors. The modular and proven CDE equipment is designed to process even the dirtiest materials, enabling the recycling or repurposing of aggregates and minimising waste. This not only helps customers comply with stricter environmental standards but also allows them to produce higher-quality outputs from waste or by-product materials.”
Baier said that water treatment is another major consideration, as processing plants are often located on sites with no direct access to water, limited space for water lagoons, or simply no authorisation to use them.
“CDE’s water recycling systems further contribute to sustainability by conserving water resources and reducing operational costs. By optimising resource recovery and minimising environmental impact, CDE helps German businesses embrace the circular economy and drive future growth in the aggregates sector.
“With over 2,500 projects and almost 150 million tonnes of recycled material diverted from landfills worldwide, CDE is actively working to change the perception of recycled aggregates in the German market. Through demo visits to other countries, exhibitions, and events, CDE aims to showcase the potential of recycled materials and educate and convince end-users about the benefits of utilising these sustainable materials.”
CDE will be at bauma 2025 to meet with German and international construction, quarrying, mining and recycling market attendees and present its solutions to recover value from waste and natural materials.
Baier expanded on CDE’s support for its German customers: “We are collaborating closely with customers, including the involvement of German-speaking CDE staff, to ensure seamless project execution. We offer tailored payment plans, including advance payments, to accommodate project timelines and financial considerations. We are also leveraging our experience and expertise to assist customers in navigating complex permitting procedures, including providing support in establishing contacts with specialised engineering firms.”
Tobias Böckle, Kleemann’s head of product development, answers Aggregates Business’s questions about the German aggregates market.
What is the German aggregates market’s current health and demand?
Investments in the German aggregates market are at a low level. High interest rates and regulatory uncertainties are weighing on the sector. However, we see the bottom coming out and are experiencing increased demand, especially in the recycling sector. With the MOBIREX MR 100 NEO Kleemann offers an impact crusher, that is predestined for urban mining and increasing demand in this sector Thanks to optional external power supply with drive concept E-DRIVE, local CO2 emission-free operation is possible as well.
What are the key market challenges, and how is Kleemann helping its German customers address them?
High flexibility, ease of operation and transportability are in demand. The ability to operate a plant flexibly with diesel or electricity is also increasingly in demand. The MOBIREX MR 100 NEO meets all these requirements.
How does Kleemann see market demand changing, if at all, in the next year or two?
The recycling market will become even more important. The requirements for the purity of recycled products are already high and will certainly increase. Manageable and efficient solutions for windsifting and washing are in demand. Sustainability, and therefore alternative fuels such as HVO or electrical drive, will become even more important. The shortage of skilled labour will also be a major challenge, so machines will have to become both easy to operate and smarter.
How big are digitalisation and automation in German customer-crushing and screening production? How is Kleemann helping customers with this?
The digitalisation of construction sites continues to be a key issue for us and our customers. Process automation is important for optimum utilisation, protection against operating errors, and increased efficiency, thus reducing costs.
To this end, our machines are equipped with innovative overload systems and the SPECTIVE operating concept with its components, such as SPECTIVE CONNECT, which ensure simple and intuitive operation. With SPECTIVE CONNECT in particular, we have introduced many innovations in recent months that help the operator to improve efficiency on a daily basis, and we have more highlights to come soon.
Another important step towards digitalisation is the John Deere Operations Center™ – the foundation for the WIRTGEN GROUP’s digital future. The central platform contains digital solutions for managing entire construction sites – anytime, anywhere. Including planning, monitoring, maintenance and analysis. The Operations Centre becomes the interface between operators and machines on site and the office of site managers and dispatchers. The result is greater visibility, efficiency and productivity.
How big a role is sustainability in the German aggregates industry? How is Kleemann assisting customers in this area?
Electrification will play an increasingly important role. The focus is on environmentally friendly processes and lower CO2 emissions. With our diesel-electric drive concept, which offers the option of an external power supply, as with our PRO machines or the MR 100 NEO, the customer is ideally positioned. A new impetus to electrification will follow.
