German construction industry revenues are expected to decline by 5% year-on-year in 2022, according to association Hauptverband der Deutschen Bauindustrie (Bauindustrie).

The association has reviewed the forecast it gave in May, when it assumed the y-o-y dip would be 2% or less. Although order books at construction companies appear well-filled, customers will get less for their money, the association notes. An increase in prices of materials and energy, rising interest rates, and overall insecurity are leading to the suspension of orders at a high level, Bauindustrie says.

In August, costs for new construction were up 17% y-o-y. Member companies reported a decline in orders by 15% year-on-year, and by 6% month-on-month. Residential construction in August fell 24% y-o-y; commercial construction is hurting from reserved investment by manufacturing industries, and public projects will be lacking money due to expenses to fight high energy costs, Bauindustrie notes.

“With the double whammy this year, I wonder how much money Berlin will have left for infrastructure,” a rebar distributor states, referring to the Ukraine war and the energy cost explosion.

The issue of critical interest rates is highlighted by a distributor in Austria, too. “It will get more difficult with new credit regulations early next year, which many private home builders cannot afford,” he tells Kallanish. “We already see that many construction companies are laying off staff to an extent we have never had; so far, they used to be desperately looking for workers.”