Many projects are still being canceled in Germany\u2019s residential construction sector. The share of companies affected stood at 11.5 percent in July, down from 12.3 percent the previous month. In May, the share was as high as 15.8 percent. This is a finding of surveys by the ifo Institute.<\/p>\n
\u201cOrder books are still full to bursting. But skyrocketing construction costs, higher interest rates, and diminished subsidy options are putting more and more projects in jeopardy. We have seen a wave of cancellations since April. All this is pushing the German government\u2019s ambitious targets for new construction into the distant future,\u201d says ifo researcher Felix Leiss.<\/p>\n
Material shortages \u2013 which had worsened dramatically with the Russian invasion of Ukraine \u2013 are easing only slowly. In July, 45.6 percent of companies in residential construction still reported delivery problems. In the previous month, the share had been 47.6 percent.<\/p>\n
\u201cAs a result of shortages and high energy costs, many building materials have become significantly more expensive, meaning construction companies have had to keep raising their prices, too,\u201d Leiss adds. While the trend is currently losing some momentum, a large number of respondents still expect further price adjustments in the coming months. Price expectations stood at 54.0 points, down from 61.5 points in the previous month.<\/p>\n
\u201cAt the same time, higher interest rates and, in residential construction, limited subsidy options are weighing on demand for construction services. Sentiment in construction is tipping,\u201d Leiss continues. A large number of companies fear a decline in business in the coming six months.<\/p>","protected":false},"excerpt":{"rendered":"
Many projects are still being canceled in Germany\u2019s residential construction sector. The share of companies affected stood at 11.5 percent in July, down from 12.3 percent the previous month. In May, the share was as high as 15.8 percent. This … Continue reading