Construction industry in trouble - orders more expensive

There seems to be no end to the negative reports from the construction industry. At the beginning of the year, the East German construction industry in particular is facing a whole "cocktail of crises". The Managing Director of the Bauindustrieverband Ost (BIVO), Robert Momberg, said that the mood in the industry is correspondingly depressed. This is what the Deutsche Presse-Agentur writes. According to a flash survey conducted by the association, almost 70 percent of companies expect lower sales in 2023 than in the previous year. By contrast, at the beginning of 2022, fewer than 50 percent of respondents had expected falling sales. A negative dynamic is currently being experienced. It is true that in the first nine months of 2022, the order intake of eastern German construction companies increased. At the same time, however, construction prices, which were already high according to Corona, had gone up once again following the outbreak of the Ukraine war. This meant, he said, that companies were not making more sales in real terms, but only that orders were becoming more expensive. Inflation is also problematic in residential construction in particular, he said. Construction interest rates had risen significantly compared with the previous year. As a result, it was not only private builders who were abandoning their projects. According to Momberg, investors are also holding back in view of the higher interest rates. In addition, high material prices were making house and apartment construction even more expensive. According to the association, new construction prices in eastern Germany rose by almost 20 percent compared to the third quarter of 2021.