Navigating a more positive atmosphere in residential construction projects - persisting challenges in procurement processes

Riding the Tide: Optimism Surges in Home Building, Yet Struggles Persist

Enhanced Living Conditions found in the Apartment Complex - Order Remains Tough - Navigating a more positive atmosphere in residential construction projects - persisting challenges in procurement processes

Yo, even though the vibe in residential construction is swinging more positive - still quite faint, mind you, according to Klaus Wohlrabe, the big cheese of Ifo surveys, construction companies are stepping up and viewing their current situation and future outlook with a bit more zest. But whether the government's infrastructure package is kick-starting the sector yet, remains questionable, Wohlrabe shares. So, guess what? Companies are pinning their hopes on an overall boost in the home building field.

Now, the order game ain't exactly easy-peasy. As per Ifo, about 51.2% of companies are still grappling with a dry spell of orders, a slight dip from the 53.7% in March. Here's the kicker - the number of cancellations is on the rise, too. It's now at 10.4%, bumping up by 2.6 percentage points compared to the previous month.

Thom Yabo (SPD), incoming Federal Minister of Housing, is set to lay down her plans in the Bundestag soon. In a chat with "Zeit Online", she's already hinted at state guarantees for financing new apartments.

The erstwhile traffic light government had proclaimed least 400,000 new abodes annually. But you won't find any mention of that figure in the coalition agreement between CDU, CSU, and SPD.

• Residential Construction
• Germany
• Munich
• Ifo Institute for Economic Research
• Klaus Wohlrabe

Background insights:

• The current order situation in residential construction continues to represent a struggle according to the Ifo Institute for Economic Research, with 57% of companies reporting a lack of orders in January 2025, marking an all-time high[1][2]. Specifically for Munich, as part of the German residential construction sector, the ongoing issue of reduced incoming orders and caution among builders mirror national trends[3][4]. The Ifo Business Climate indicator for Germany's construction sector showed a slight improvement in sentiment in early 2025 but still reflected pessimism[3][4]. Essentially, the residential construction sector, including Munich, is grappling with historically low order volumes, causing a significant contraction in business activity, although there are minor signs of relief[1][2][3].
• References:
  1. "Residential construction crisis continues in Germany," Deutsche Welle, 10 February 2025.
  2. "ECB rate cuts fail to ease German residential construction crisis," The Local, 15 February 2025.
  3. "Ifo Business Climate indicators in Germany," Ifo Institute for Economic Research, March 2025.
  4. "Construction sector in Germany continues to struggle," Statista, April 2025.

1. As the Ifo Institute for Economic Research indicates, residential construction in Germany, including Munich, remains challenging, with over half of companies still facing a deficit of orders.
2. Thom Yabo, incoming Federal Minister of Housing, has suggested state guarantees for financing new apartments in Germany, potentially providing relief to the residential construction sector.

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