Barely a year after the start of the Russian war of aggression in Ukraine, which drove up building material prices and interest rates, the construction industry is in a state of shock. “Fear is rampant in housing construction,” warns the Institute for Economic Research (ifo) in a recent survey on order cancellations in housing construction. Accordingly, the number of order cancellations in residential construction rose again in February. A total of 14.3 percent of the companies surveyed by ifo reported canceled orders in the past month. In January, this value was still 13.6 percent.
The ifo sees the reasons for the decline in the significantly higher interest rates and the increased construction costs. This becomes clear, for example, with the number of building permits. In January, they fell by 26 percent compared to the same month last year. The decline in orders is now threatening the existence of some construction companies. The first companies are registering short-time work or are already insolvent.
If construction does not get going again this spring, representatives of the construction industry warn that there will soon simply be insufficient construction for “couples, students, singles and families, in short for the middle of society”.
