Germany's VDZ extends cautious outlook

Speaking about the development of the German cement market, Christian Knell, president of Germany's cement association VDZ, says "It has rarely been so difficult to make a forecast as it is this year.”

Since March 2020 the coronavirus pandemic has created a great deal of uncertainty amongst most people and companies in this country. So far the cement manufacturers have had no grounds for complaint, not least because favourable weather conditions helped the cement market to get off to a good start in 2020.

"Despite the lockdown coming into effect in March, the demand for cement was upheld by the continuation of work on construction sites – also thanks to the quick action taken by the government,” says Mr Knell, looking back on the situation.

For 2020 VDZ expects cement consumption in Germany to remain stable at around last year’s level of approximately 28.7Mt thanks to an excellent start to the year and a  higher number of delivery days. However, the coronavirus pandemic is likely to dampen the demand for construction work and cement from the last quarter of 2020. This is already starting to show in the official statistics in the form of lower levels of incoming orders and granted building permits, says Mr Knell.

VDZ is also uncertain about how the demand for construction work might develop in the year 2021. "We are expecting more cautious activity compared to 2020,” according to the VDZ president. A lot of businesses and local authorities are likely to postpone or even cancel planned new construction projects on account of the gloomy budget situation. Less demand for private housing construction is also expected, not least due to uncertainty in the employment market.

However, the stimulus pledges made by the German government are expected to provide a positive impulse in the form of federal infrastructure projects or the construction of multi-family housing, for example. Therefore, VDZ forecasts a 3-5 per cent drop in demand for cement in 2021 compared to 2020. Christian Knell remains nevertheless in a positive mood: "Based on the overall level of the past few years this still leaves us in a good position."