Energy prices, explosion in building material costs: around half of housing construction companies are still complaining about a lack of orders. However, one figure has improved significantly, according to the ifo Institute.
The lack of orders in German housing construction decreased only slightly in August. 50.6 percent of companies complained about it, compared to 51.3 percent in July, as the Munich-based ifo Institute announced on Monday in its survey of managers. The proportion has thus remained above the 50 percent mark for nine months.
“The crisis in housing construction will drag on for a long time,” predicted ifo survey chief Klaus Wohlrabe. “Companies are still looking for signs of hope.” The business climate in housing construction also worsened in August. Every second company is pessimistic about the coming months. “There is currently very little positive news,” said the ifo Institute.
Significantly fewer orders are cancelled
At least the cancellation rate for orders has been falling steadily for the past six months: Currently, 11.7 percent of companies are reporting canceled orders. By comparison, in October last year the proportion was almost twice as high at 22.2 percent. “Many companies are trying to compensate for the crisis in housing construction by taking on orders from road construction,” said Wohlrabe.
Housing construction in Germany has been weak for some time. High interest rates and expensive building materials are keeping many investors and private households from building. The IG Bau trade union and the German Tenants’ Association are therefore calling for a government stimulus package to combat the housing shortage. To achieve this, the federal and state governments would have to subsidize the construction of new housing with 20 billion euros per year in the future, both organizations announced on Friday.
IG Bau and Tenants’ Association demand 20 billion
The aim must be to massively expand the supply on the housing market – in social housing, affordable housing and in the creation of home ownership. “There is a shortage of 540,000 apartments in Germany,” said the federal chairman of the Industrial Union for Building, Agriculture and Environment (IG Bau), Robert Feiger. “In addition, the construction industry is facing a serious crisis.”