Williamstown, MA -- (SBWIRE) -- 05/08/2012 -- BMI View: As the Eurozone crisis grinds on, the uncertainty spreading to the German infrastructure sector grows. An underlying trend toward a slowdown has weakened forecasts for 2012. The construction industry value is expected to stand at US$127.9bn for 2012, based on growth of just 1.35% year-on-year (y-o-y). Growth prospects will remained constrained over the forecast period, with average 0.87% y-o-y growth between 2012 and 2016, when the industry value will reach US$135bn.

Highlights include:

- A strategic partnership agreement was signed between Russia's state-run Gazprom and German industrial conglomerate Siemens to jointly implement projects in several sectors. The agreement encompasses joint projects in a diverse range of fields, including:, crude oil and liquefied natural gas production, condensate, gas transmission, storage and utilisation, as well as medical technologies, automated control and security systems and electrical power.
- German energy company E.ON has started exploratory discussions regarding the possible sale of its majority stake in its regional energy distribution grid unit E.ON Westfalen Weser to local municipalities. A company spokesperson has refused to give any valuation for the unit, adding that the company's remaining six regional power suppliers are not for sale. The company's power distribution grids are an essential part of its strategy to cooperate with municipalities.
- German construction company Wayss & Freytag Ingenieurbau, a unit of Royal BAM Group NV, secured a construction contract worth EUR420mn (US$543.8mn) in Germany. The contract is to construct a 35km underground wastewater pipeline as part of an upgrade of the wastewater system of the Emschergenossenschaft water management association. Construction work is scheduled to start in spring 2012 and is likely to be completed in five years.

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The political challenges facing Germany are mainly centred around trying to foster economic growth in East Germany, arresting (or managing) population decline and dealing with the potential implications of further EU integration. Merkel's 'tough love' approach to the eurozone debt crisis has placed her Christian Democratic Union (CDU) party in a good position. The political risk profile for Germany remains among the best in the world.

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