Construction companies are losing orders due to the rise in energy and material costs and higher interest rates. New residential construction is particularly affected. The president of the main association of the German construction industry is now giving a gloomy forecast for the turnover in the industry.
The high prices for energy and materials and the rise in interest rates are depressing demand for residential construction and are causing problems for the construction industry. Orders in the German construction industry and real sales fell in August, as reported by the Federal Statistical Office. "We see with great concern an increasing slump in incoming orders in residential construction," said Felix Pakleppa, general manager of the Central Association of the German Construction Industry (ZDB).
According to data from the Federal Statistical Office, the industry received a price-adjusted 6.0 percent fewer orders in August than in the previous month. Compared to the same month last year, there was even a decline of 15.6 percent. In the first eight months of the year, the price-adjusted order intake fell by 5.2 percent compared to the same period of the previous year. The main construction trade includes the construction of roads, railway lines and lines (civil engineering) and buildings (structural engineering). The companies had to accept losses in ongoing business.
In August, price-adjusted sales in the main construction trades were 5.1 percent below the figure for the same month last year. Due to the sharp rise in construction prices, nominal revenues rose significantly by 11.2 percent compared to the same month last year. From January to August, price-adjusted sales fell by 4.3 percent, nominally they rose by 11.5 percent.
The order figures are not a good omen for the current year, said the President of the German Construction Industry Association (HDB), Peter Hübner. In residential construction, you can already feel a de facto slowdown in investment - incoming orders here in August fell by 24 percent in real terms. In view of the high construction prices and the sharp rise in interest rates for real estate loans since the beginning of the year, builders have become increasingly cautious.
"We fear that the public sector - in view of the high expenditure to compensate for increased energy costs - will now save on construction investments and will not be able to compensate for the inflation-related price effects," said Hübner. "It is becoming increasingly clear that the political claim to build 400,000 apartments per year will not work," said Pakleppa, ZDB's general manager. Residential construction now urgently needs the announced gas price brake." The pressure of material prices on construction prices must be reduced.
