Yet More Cancellations in German Residential Construction – Business Climate Falls to All-Time Low

In German residential construction, more and more companies are reporting canceled projects. In September, 21.4% of businesses were affected, up from 20.7% in the previous month. This is one of the findings described in an article in the latest issue of ifo Schnelldienst. “Many projects are no longer economically viable due to high interest rates and increased construction costs. The apartments that aren’t being started today will be missing from the rental market in two years’ time. At -54.8 points, the ifo Business Climate for residential construction is now at its lowest level since the survey began in 1991,” says Klaus Wohlrabe, Head of Surveys at ifo.

Complaints of a lack of orders in the industry are also getting increasingly louder; 46.6% of companies are currently affected, up from 44.2% in August. “That’s a threefold increase over the past 12 months, which is a dramatic development,” Wohlrabe adds. The survey was conducted prior to the German government’s residential construction summit, which took place at the end of September. “It remains to be seen whether the measures announced at the summit can revive the country’s residential construction industry. The conditions for new construction are difficult, to say the least,” Wohlrabe says.