Wave of Cancellations in German Residential Construction Grows

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.

In February, 23.4 percent of residential construction businesses reported insufficient orders. In January, the figure was 25.3 percent. A year ago, it stood at only 9.5 percent. Moreover, 6.9 percent of businesses complained of financing difficulties in February, compared with 5.5 percent in January and 3.1 percent in February 2022. “Fear is sweeping the residential construction sector: business expectations fell to a new record low – their lowest level since the survey began in 1991,” Leiss continues. The expectations indicator stood at minus 65.6 points.