Housing Construction Outlook Shows Marginally Better Mood - Yet, Order Predicament Persists
Enhanced Residential Construction: Challenging Orders Persist in the Market - Navigating a favorable atmosphere in housing construction remains challenging due to ongoing supply chain complications
Hey there! The vibe in the residential construction sector, as per Klaus Wohlrabe, head honcho at Ifo surveys, is showing a tad of improvement - mind you, it's still on the low side. Companies are finding themselves with a rosier perspective when it comes to their current state and future prospects. Yet, whether the recent government's infrastructure package is playing a role in this shift isn't entirely clear, according to Wohlrabe.
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However, it's the order situation that remains in a pickle. Ifo reports that just under 51% of companies are struggling with order shortages, a slightly lower percentage compared to 53.7% in March. On the flip side, cancellations are on the rise, with approximately 10.4% of companies reporting cancelled orders - that's a 2.6 percentage point increase from the previous month.
Come Thursday evening, Germany's new Federal Minister of Housing, Verena Hubertz (SPD), will share her strategic plan in the Bundestag. During a previous interview with "Zeit Online," she mentioned the possibility of state guarantees for funding new apartment projects.
While the previous government had initially pledged to build 400,000 new apartments every year[2], there's no mention of such a figure in the coalition agreement between CDU, CSU, and SPD.
- Residential Construction
- Germany
- Current Situation
- Future Economic Outlook
- Ifo Institute for Economic Research
- Order Shortage
- Cancellations
- Klaus Wohlrabe
- Housing Crisis
- European Central Bank
- Government Infrastructure Package
[1] Ifo Institute for Economic Research, press release, 'Ifo Building Climate - Orders situation in German construction industry still tense after 51.2 percent of companies report lack of orders in January 2025,' May 2, 2025.[2] Der Spiegel, 'Germany's New Government: Dealing with Construction Shortages,' December 15, 2024.[3] Statista, 'Ifo Building Climate - Orders situation in German construction industry,' various dates.
- The improvement in the residential construction sector's outlook, as stated by Klaus Wohlrabe, raises questions about the impact of the government's infrastructure package, particularly in light of the persisting order predicament.
- The new Federal Minister of Housing, Verena Hubertz, is scheduled to present her strategic plan against the housing crisis, which might include state guarantees for new apartment projects to combat the ongoing shortage of housing, as suggested in a previous interview.
