Construction Prices in Germany Rise Further
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.
“In the previous year, the upheavals of the coronavirus pandemic created shortages of various building materials. This tight supply situation hit the industry amid unabated demand for construction services and full order books. And these shortages caused material prices to rise, in some cases drastically,” Leiss adds. In February, 23.5 percent of building construction companies reported supply problems for building materials, down from 25.3 percent in the previous month. In civil engineering, the figure was 17.5 percent, down from 20.9 percent in January. “Problems continued especially for insulation materials. Wood once again featured prominently in these latest responses. This can be seen both in wood wholesale and in building elements made of wood. Here again, price increases were reported very often,” Leiss continues. In building construction, order books continued to grow even during the coronavirus pandemic. Whereas they covered 4.4 months in January 2020, they currently stand at an all-time high of 5.5 months.
“It’s too early to tell what impact the war in Ukraine will have on the construction industry,” Leiss adds. This survey was completed before the outbreak of war.
