In German housing construction, more and more companies are complaining about cancellations and a lack of orders. “Cancellations in residential construction are piling up to a new high,” said the head of the Ifo surveys, Klaus Wohlrabe. In August, 20.7 percent of companies reported canceled projects – an increase of 1.8 points compared to the previous month. 44.2 percent of companies reported a lack of orders – 3.9 percentage points more than in July.
“We have not observed anything comparable since the survey began in 1991. The uncertainty in the market is huge,” said Wohlrabe about the cancellations. As a result of the rapidly increasing construction costs and the significantly higher interest rates, many projects that were still profitable at the beginning of 2022 are currently no longer feasible.
“Some companies are already up to their necks in water,” said Wohlrabe. “Currently, 11.9 percent of housing construction companies are reporting financing difficulties. This is the highest figure in over 30 years.” And the majority of companies feared further declines in business over the next six months. “Business expectations are at an exceptionally weak level of minus 60.1 points.”
