BERLIN (Reuters) - Germany's HDE retail association and the HDB construction association on Wednesday raised their sales forecasts for 2016 in a further sign that private consumption and building activity will propel growth in Europe's biggest economy this year.

HDE said it now expects nominal retail sales to increase by 2.5 percent in 2016, up from its previous forecast of 2.0 percent. Sales in the first half of the year were up 2.6 percent, it added.

HDB lifted its forecast for nominal construction sales to 5 percent growth in 2016, up from 3.5 percent previously.

Orders in construction reached a level last seen during the boom times following unification and the economic upswing in East Germany in the mid-1990s, it added.

The German government expects soaring private consumption, higher construction activity and increased state spending on migrants to help the economy to grow by 1.7 percent this year. Some economic institutes predict an expansion of 1.9 percent.

(Reporting by Michael Nienaber; Editing by Madeline Chambers)