The German construction industry is groaning under high prices and great uncertainty. This leads to a drastic drop in orders in June. Compared to the same month last year, the decline is even more pronounced. In view of the prices, private individuals in particular decide against building a house.
High material prices, rising interest rates and economic uncertainties have halted the boom in construction. In the German construction industry, real sales and orders are declining, as reported by the Federal Statistical Office. The associations of the construction industry and trade warn that under these conditions it would not be possible to build as many apartments as needed.
According to the statistics, 5.5 percent fewer orders were received in June than a month before. Compared to the same month last year, this even meant a decline of 11.2 percent. Only the sharp rise in prices for construction work ensured that orders were nominally 4.1 percent higher than a year ago. In the first six months, the order value fell by 3.5 percent in real terms. The companies have already had losses in their ongoing business. Price-adjusted sales in June of this year were 11.3 percent below the previous year's figure. However, due to the sharp rise in prices, nominal revenues climbed by 6.2 percent. In the first half of the year as a whole, price-adjusted sales declined by 2.7 percent.
Residential construction has been particularly hard hit. In addition to high construction costs and rising interest rates, private builders also have to cope with rising energy and living costs, explained the general manager of the construction industry association, Tim-Oliver Müller. "Some people are currently deciding against building a house. But even among institutional investors, a number of residential construction projects are being put to the test and postponed for the time being. There will be no relaxation in the tense housing market." In the meantime, building construction on behalf of companies is also declining.
The construction industry association ZDB also mentions the unclear funding rules as an investment barrier. "More and more projects are being called into question. In addition to the lack of orders, there are also cancellations," says General Manager Felix Pakleppa, describing the situation. You will see clear impacts in the coming months.
