Scoop: Positive Shift in Mood for Residential Construction, Despite Continued Challenges
Residential construction experiences an uplift; however, order conditions remain challenging. - Enhancing Mood in Housing Construction: Order Conditions Despite Challenges Persist
Let's talk about the recent blip in sentiment amongst the bigwigs in the residential construction industry. Klaus Wohlrabe, the man behind the curtain at Ifo surveys, gave us the lowdown. He hinted at a boost in overall positivity towards both the current situation and future economic prospects in the sector. But remember, we're still hanging in the balance about whether the government's propositioned infrastructure package is bringing real change to the table.
But here's the hard truth—the order situation isn't looking rosy. Ifo reports that a whopping 51.2% of companies are reeling from a lack of orders, with the number just a tad more stringent in March, hitting 53.7%. To make matters worse, cancellations are on the rise. Cue the dramatic music, over 10% of firms have reported canceled orders, a 2.6 percentage point increase from the previous month.
Now, let's take a peek into the near future. On Thursday evening, the new Federal Minister of Housing, Verena Hubertz (SPD), is set to showcase her game plan in the Bundestag. Already making headlines in an interview with "Zeit Online", she's mentioned potential state guarantees for financing the construction of new apartments as a possible solution.
In the past, the political duo promising to construct a whopping 400,000 new apartments annually has been quite the buzz. Yet, this figure conspicuously vanishes from the coalition agreement between CDU, CSU, and SPD—the current powers that be.
- Order Situation
- Germany
- Munich
- Ifo Institute for Economic Research
- Residential Construction
- Klaus Wohlrabe
Bonus Tidbits:Germany's construction industry may be in for a rough ride, according to economic forecasts. The sector is projected to witness a 1.8% decline in real terms by 2025, marking a five-year consecutive downward spiral. This is due to a perfect storm of factors like escalating inflation, high construction material costs, and slumping demand from both the industrial and residential sectors[1][3]. The total number of building permits issued in Germany plummeted by 11.5% year-on-year in 2024, with residential building permits taking an even steeper drop of 13.4% during the same period[1][3]. For more specific insights from the Ifo Institute for Economic Research or tidbits from Klaus Wohlrabe, dig a little deeper—the search results don't reveal much about the residential construction orders in Munich or Klaus' takeaway.
- The order situation in the residential construction industry in Munich, Germany is dismal, with 51.2% of companies struggling with a lack of orders, and cancellations on the rise.
- In an effort to boost the residential construction sector, the new Federal Minister of Housing, Verena Hubertz, is considering state guarantees for financing the construction of new apartments as a solution, although the political promise to construct 400,000 new apartments annually has been noticeably absent from the current coalition's agreement.
