Felix Leiss

Cancellations in residential construction have continued to rise, finds an ifo Institute survey, with 16 percent of companies reporting canceled orders. That represents an increase from 14.3 percent in February and 13.6 percent in January. “The situation in residential construction continues to deteriorate. Due to the rapid rise in construction costs and higher financing interest rates, many housing projects are no longer profitable, have been postponed, or are being canceled altogether. New business is literally collapsing and the industry has grave concerns about its future,” says ifo researcher Felix Leiss. 

More orders were canceled in Germany’s residential construction sector in February than in the previous month, finds an ifo Institute survey. In February, 14.3 percent of companies reported canceled orders, up from 13.6 percent in January. “New business is suffering badly from significantly higher interest rates and increased construction costs. On average, order books are still reasonably full, but quite a few companies are now complaining about a lack of orders,” says ifo researcher Felix Leiss.

Many German housing projects are being canceled, finds an ifo Institute survey. The share of construction companies affected fell to 13.6 percent in January, down from 15.9 percent in December. “Although cancellations are declining somewhat, the level is still exceptionally high,” says ifo researcher Felix Leiss. “Companies see dark clouds on the horizon: business is still supported by high order backlogs, but there is anxiety with regard to future developments in residential construction.” 

Cancellations are growing in number in German residential construction, finds an ifo Institute survey. In November, 16.7 percent of the companies surveyed were affected, up from 14.5 percent in the previous month. “Companies still have well-filled order books. But constantly climbing construction prices, higher interest rates, and fewer subsidy options are weighing on new business. For several months now, these factors have led to a conspicuous number of cancellations, and companies are very concerned,” says ifo researcher Felix Leiss. 

The wave of building construction cancellations in Germany is receding a little. In October, 11.3 percent of businesses were affected, down from 13.2 percent in September. “Faced with construction costs that are often almost impossible to calculate and rapidly rising construction interest rates, many builders are throwing in the towel and putting projects on hold or canceling them altogether. We’re seeing lots of order cancellations in residential construction. But commercial building construction is also struggling with cancellations,” says ifo researcher Felix Leiss.

The wave of cancellations in German residential construction is surging higher. In September, 16.7 percent of the businesses surveyed were affected, up from 11.6 percent in the previous month. This is a finding of surveys conducted by the ifo Institute. “What with skyrocketing material and energy prices, as well as the rise in financing interest rates, planning certainty is gone and construction costs continue to climb. For some developers, the overall situation is no longer tenable, and they are shelving projects or even pulling the plug entirely,” says ifo researcher Felix Leiss.

Germany’s residential construction industry is still seeing a large number of order cancellations. In August, 11.6 percent of the businesses surveyed were affected, up from 11.5 percent in the previous month. This is a finding from the ifo Institute’s survey.

Many projects are still being canceled in Germany’s 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. “Order 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’s ambitious targets for new construction into the distant future,” says ifo researcher Felix Leiss.

Germany’s construction sector is currently experiencing an uncommonly high number of project cancellations. In building construction, the proportion of affected companies was 11.5 percent in June; in May, that figure was even higher at 13.4 percent.  In civil engineering, the figure was 9.0 percent, up from 8.8 percent in May. This is the finding of an ifo Institute survey. “The scale is similar to what happened during the coronavirus shock in spring 2020. This time, we’re seeing particularly frequent cancellations in residential construction. On the other hand, order books remain full to bursting on average,” says ifo researcher Felix Leiss. 

The shortage of materials on German construction sites has reached its highest level since 1991, finds an ifo Institute survey. “With Russia’s attack on Ukraine, supply problems for building materials have taken a drastic turn for the worse. Material prices continue to rise as a result of shortages and higher energy costs. Due to rising construction costs and higher interest rates, more orders are being canceled, especially in residential construction,” says ifo researcher Felix Leiss. In building construction, 56.6 percent of companies reported shortages in May, up from 54.2 percent the previous month. In civil engineering, the proportion was 44.8 percent. Of these companies, 91.1 percent reported that the war in Ukraine had exacerbated material shortages. 

Supply problems on German construction sites have once again worsened significantly and expectations in the sector have taken a nosedive at the same time, according to surveys by the ifo Institute. In April, 54.2 percent of companies in building construction reported material shortages, up from 37.2 percent the previous month. For civil engineering companies, the April figure was 46.2 percent, up from 31.5 percent. “These are all-time highs since the start of the time series in 1991,” says ifo researcher Felix Leiss. Business expectations have also deteriorated: in building construction, they fell to minus 46.9 points, once again the lowest level since 1991. In civil engineering, the figure dropped as far as minus 48.6 points.

German construction companies are planning to increase prices across the board, according to surveys by the ifo Institute. In building construction, one in two companies expected price adjustments in the coming months. Price increases were also planned in civil engineering, but not to quite the same extent as in building construction. “This is a consequence of the rapid cost increases for building materials, which are now being passed on to customers,” says ifo researcher Felix Leiss.

German construction businesses are experiencing supply bottlenecks less often, according to surveys by the ifo Institute. In building construction, 25.3 percent of participants reported disruptions, down from 31.3 percent in December. The situation in civil engineering also eased somewhat, with 20.4 percent of businesses reporting problems from supply bottlenecks. In the previous month, the figure was 23.1 percent. There was also less talk of a shortage of skilled workers. Nonetheless, in many places vacancies couldn’t be filled promptly. “Order books are full to bursting, but one in three construction businesses can’t find enough skilled workers,” says ifo researcher Felix Leiss. 

Material shortages on German construction sites eased slightly toward the end of the year. In December, 31.3 percent of companies in building construction experienced supply problems, down from the previous month’s 34.5 percent, finds an ifo Institute survey. In civil engineering, 23.1 percent of companies were affected, down from 28.7 percent in November. “Despite recent improvements, the situation remains tight. Compared to their long-term trend, these values are still exceptionally high,” says ifo researcher Felix Leiss. 

With the German construction industry booming, problems sourcing material supplies are expected to persist until next spring. Companies believe supply problems will continue for an average of five months, according to a new ifo survey conducted in October. In the same survey, 38.0 percent of companies in building construction also reported disruptions due to delivery delays; in September the figure was still 36.3  percent. “The easing observed in recent months has come to a halt in building construction,” says ifo researcher Felix Leiss.

The shortage of skilled workers in Germany’s building construction has intensified, finds an ifo Institute survey. In October, 34.1 percent of construction companies reported a shortage of skilled workers, up from 33.5 percent in September. In civil engineering, that number fell to 36.8 percent from 37.9 percent in the previous month.

German construction sites face an ever-growing shortage of skilled workers, finds an ifo Institute study. In building construction, 33.5 percent of companies reported problems finding skilled workers in September. In civil engineering, a full 37.9 percent of companies complained about a lack of suitable applicants.

The supply situation on German construction sites improved in September. Just 36.3 percent of companies in building construction reported material shortages, down from 42.2 percent in the previous month. In civil engineering, the figure was 27.6 percent – 3.8 percentage points less than in August. “However, residential construction is suffering the most, with 40.0 percent of companies still reporting that their construction activities were hampered by delivery problems,” says ifo researcher Felix Leiss.

The shortage of materials on German construction sites has eased, according to surveys by the ifo Institute. In August, 42.2 percent of companies in building construction said they were suffering from material shortages, down from 48.8 percent in July. The situation in civil engineering also eased somewhat: 31.4 percent of companies reported problems from supply bottlenecks, down from 33.9 percent in the previous month.

The shortage of materials in Germany’s construction industry has eased slightly, according to surveys by the ifo Institute. In July, 48.8 percent of companies in the building construction sector reported that their businesses had suffered from delayed deliveries of intermediate products.

German construction companies are facing increasing difficulties from shortages of materials and rising purchase prices, according to surveys by the ifo Institute. “There are all sorts of problems, and they have worsened again compared to the previous month,” says Felix Leiss, an ifo Institute survey expert. In June, 95.2 percent of respondents reported that purchase prices had risen in the previous three months.

A great many German industrial companies are reporting price increases for materials in the past three months. In ifo’s June survey, it was 92.0 percent. In the textile industry and in furniture manufacturing, the proportion was fully 100 percent of participants. Rubber and plastic products weren’t far behind, at 99.4 percent.

The materials problem on German construction sites has worsened. In building construction, 43.9 percent of companies reported in May that they were having problems procuring construction materials in time. This is up from 23.9 percent in April and just 5.6 percent in March, the ifo Institute reports. Civil engineering was slightly less affected, with 33.5 percent in May. In April, only 11.5 percent of the companies in that sector had reported bottlenecks. “Capacity utilization in the industry is still high, but supply bottlenecks are causing worries for more and more companies,” says Felix Leiss, a survey expert at the ifo Institute.

Germany’s construction industry is facing serious material bottlenecks, according to surveys by the ifo Institute. “We haven’t seen a bottleneck like this since 1991. This evidently caused construction activity to slow down in April, at least temporarily,” says Felix Leiss, a survey expert at the ifo Institute.