Real sales decline expected
Construction industry pessimistic for 2023
1/16/2023 7:31 am
High material prices and rising mortgage interest rates are causing headaches for the construction industry. The main association of the German construction industry is forecasting a real decline in sales and only 250,000 new apartments for this year – significantly less than the traffic light coalition promises.
The German construction industry is pessimistic about the future and is also preparing for a drop in sales in 2023. This year, a real minus, i.e. adjusted for price increases, is expected in sales, said the President of the Main Association of the German Construction Industry (HDB), Peter Hübner, the editorial network Germany. The association is already assuming a real minus of 5 percent for 2022. “And we expect something similar in 2023, probably a 6 percent real decline,” said Hübner.
With a view to the future, the mood on Germany’s construction sites is gloomy. High material prices and rising mortgage rates made house building difficult. “But the situation is not hopeless. The mood is still good at the moment because we have a historically high order backlog,” said the HDB President, adding: “We will not be reducing staff.”
At the same time, the HDB assumes that the federal government’s targets for housing construction will not be achieved by a long shot this year. “It is realistic that we will complete around 250,000 apartments,” said Hübner. “That puts us a long way from the 400,000 apartments promised by Building Minister Klara Geywitz.”
The call for more living space is becoming louder in civil society. An alliance of tenants’ associations, building trade unions and social and industry associations warns of an ever-worsening housing shortage in Germany. “The situation on the housing market is dramatic,” said the President of the German Tenants’ Association, Lukas Siebenkotten. “There is a lack of at least 700,000 apartments in Germany.”
In order to create living space and promote the transport infrastructure, the HDB calls for a “double boom” during construction. “We need 15 billion euros a year for new housing subsidies,” said Hübner. “And for the transport infrastructure – i.e. rail, waterways and roads – another 25 billion euros. A 40 billion package.”