Municipalities across Germany are reporting a growing investment backlog, according to the latest KfW Municipal Panel survey. The perceived backlog has reached EUR 215.7 billion, marking an increase of 15.9 percent from the previous year. This figure represents the amount needed to restore infrastructure to acceptable standards.
The annual survey, conducted by the German Institute for Urban Affairs on behalf of KfW Research, covers treasuries of cities and municipalities with more than 2,000 inhabitants and all county districts. The most recent data was collected between January and March 2025.
School buildings represent the largest portion of this backlog, requiring EUR 67.8 billion or 31 percent of the total amount needed. Roads and transport infrastructure follow closely behind with a requirement of EUR 53.4 billion or 25 percent.
Dr Dirk Schumacher, KfW Chief Economist, commented on these findings: “The strong rise in the figure for school buildings could be a result of the legal entitlement to all-day primary schools as of 2026. Local authorities are now realising that they have a lot of ground to make up.”
The survey revealed that larger municipalities report higher backlogs in school building investments compared to smaller ones. Almost 90 percent of towns with populations over 50,000 reported significant backlogs in this area.
Investment challenges also stem from issues related to upkeep and maintenance. Nineteen percent of municipalities stated they can invest little or nothing in maintaining their infrastructure—an increase from last year’s figures.
To address these challenges, municipalities plan to invest EUR 48 billion in 2025—a slight increase from previous years’ planned investments which often fall short due to various non-monetary factors such as staffing constraints and complex planning procedures.
“This is where non-monetary factors come into play – staffing constraints in the planning authorities, complex documentation requirements and protracted planning and consent procedures,” Dr Schumacher explained.
He also noted that "the German government’s special infrastructure fund will also benefit municipalities," emphasizing the importance of distributing funds efficiently without excessive bureaucracy.