Press release -

Residential Construction Cancellations Still Numerous in Germany

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.

Material shortages – which had worsened dramatically with the Russian invasion of Ukraine – 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. “As 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,” 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. “At 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,” Leiss continues. A large number of companies fear a decline in business in the coming six months.

Cancellations in Rsidential Construction
Construction, Graphic, ifo Institute
Cancellations in Rsidential Construction
Contact
CV Foto von Felix Leiss

Felix Leiss

Specialist
Tel
+49(0)89/9224-1358
Fax
+49(0)89/985369
Mail
Harald Schultz

Harald Schultz

Press Officer
Tel
+49(0)89/9224-1218
Fax
+49(0)89/907795-1218
Mail