Investment backlog in cities: 215 billion euros for necessary infrastructure!

Investment backlog in cities: 215 billion euros for necessary infrastructure!

Germany's cities and municipalities are facing an enormous financial challenge. The investment requirement for necessary infrastructure amounts to a total of 215.7 billion euros. This record sum shows a dramatic increase in the investment backlog of 16 percent compared to the previous year, which corresponds to an increase of 29.6 billion euros South German newspaper reported.

However, not all of the €48 billion in investments planned for 2025 are expected to be spent as planned. Investments of 47 billion euros are planned for 2024, but projections show that the actual funds will probably only be 30 billion euros. KfW chief economist Dirk Schumacher emphasizes that fresh state billions from the special infrastructure fund could be helpful, but will be far from enough.

Urgent need for action

Burkhard Jung, President of the German Association of Cities, appeals to the government to distribute the money to the municipalities quickly and easily. Currently, 31 percent of the investment backlog, i.e. 67.8 billion euros, goes to school buildings alone. Studies show that 56 percent of municipalities report serious deficiencies in this area. The need for investment in school buildings is therefore obvious.

In addition, there are significant deficits in other areas: 53.4 billion euros are needed to renovate roads, while 19.9 billion euros are planned for fire and disaster protection and 19.5 billion euros for administrative buildings. Sports halls and swimming pools require investments of 15.6 billion euros. The pressure on municipalities is growing as the proportion of municipalities that have no longer been able to adequately maintain their infrastructure over the last five years has increased. In the area of ​​school buildings, this proportion increased from 11 to 17 percent; for roads and transport infrastructure there was an increase from 26 to 32 percent.

KfW municipal panel and data analyses

In order to better understand the situation, the KfW municipal panel is of central importance. It provides important scientific results for the economic policy debate in Germany. The methodology includes comprehensive collection, preparation and evaluation of the data required for an accurate picture of municipal investments and needs. In a method paper, KfW explains the procedure from the survey to the end of the analysis, including the extrapolation and weighting of the results.

In addition, the strengths and weaknesses of the methods are discussed in order to shed light on the significance of the results. The data obtained is representative of the municipal level nationwide and offers valuable insights into the investment needs of districts, independent cities and municipalities with more than 2,000 inhabitants. However, high demands on data quality and quantity are necessary for regionalized results at a local level.

In summary, the KfW analysis shows that the need for action in German municipalities is enormous. The future of infrastructure depends crucially on the availability and distribution of funds.