Germany's construction sector faces deepening challenges despite a new €500 billion infrastructure fund.

While aimed at revitalizing infrastructure over 12 years, experts warn the fund may worsen the crisis for small and medium-sized construction firms.

These companies, reliant on private housing projects, are unlikely to benefit as the fund primarily supports large-scale public works.

Rising material costs, higher interest rates, and labor shortages further strain smaller builders.

Insolvencies in the sector have surged, with revenues dropping over 10% in two years.

Critics also highlight insufficient allocations for municipalities, which manage most public infrastructure.

Calls for structural reforms, including reduced bureaucracy and faster approvals, grow louder as the sector struggles to recover.