Sentiment in German Residential Construction at an All-Time Low

The business climate in German residential construction has fallen from -56.9 points to -59.0 points – the lowest value ever measured. The same is true for business expectations, which have sunk even further, dropping from -64.7 points to -68.9 points. “The outlook for the coming months is bleak,” says Klaus Wohlrabe, Head of Surveys at ifo. “Residential construction is still facing the double whammy of a lack of new orders and ongoing project cancellations.”

“The lack of orders is weighing on the house building business,” Wohlrabe adds. In January, 52.5% of companies reported a lack of orders, down from 56.9% in December. There was a decline in cancellations to 17.4%, down from 22.1% in the previous month. However, “it’s too early to talk of a trend reversal in residential construction, since the tough conditions have hardly changed at all,” Wohlrabe says. “High interest rates and construction costs aren’t making things any easier for builders.”