Construction Sector Mood Enhances Slightly, Order Situation Persists
Improvement Spotted in Real Estate Sector: Persistent Challenges Persist in the Order Situation - Navigating the complexities in procuring materials for housing construction remains challenging.
Catch a breath, folks! The construction sector, particularly in housing, is demonstrating a tad more cheer, but the situation has a long way to go, according to Klaus Wohlrabe, the guy behind Ifo surveys. Companies have embraced a more positive outlook regarding the current situation and the future economic landscape. However, it remains uncertain if the government's infrastructure package is the culprit behind this improvement.
But here's the kicker - the order situation ain't exactly a walk in the park. More than half of construction companies (51.2%) report being UK-5 in terms of orders, still slightly more than in March (53.7%). Worse yet, cancellations are on the rise, with 10.4% of companies reporting order cancellations - a 2.6-point increase from the previous month.
Brace yourself for more housing talk as the new Federal Minister of Housing, Verena Hubertz (SPD), plans to share her program in the Bundestag this Thursday evening. In an exclusive interview with "Zeit Online," she already hinted at state guarantees for financing new apartments.
Remember the big promise from the traffic light government to build 400,000 new apartments per year? Well, that number doesn't appear in the coalition agreement between CDU, CSU, and SPD.
- Construction Order Situation
- Germany
- Munich
- Ifo Institute for Economic Research
- Housing Construction
- Klaus Wohlrabe
Construction Nationwide
- The residential construction sector in Germany has faced an unprecedented order shortage, surpassing record levels in January 2025 (57% of companies reported a lack of orders). Despite ECB interest rate cuts, Klaus Wohlrabe suggests that the residential construction crisis has turned into a regular thorn in the construction sector's side, with the order situation remaining challenging.
- Though the order shortage has eased somewhat by May 2025, it still looms large, with the number of companies reporting a lack of orders decreasing but staying elevated, pointing to a continuing difficult climate for residential builders.
Construction in Munich
- Due to the lack of explicit data for Munich, the situation of the city's residential construction sector is not detailed. However, given Munich's status as a major urban center, it can be assumed that the order shortage affecting Germany as a whole extends to cities like Munich, where residential construction demand is typically high but sector constraints remain a persistent problem.
- The positive outlook among construction companies in regards to the current situation and future economic landscape, as mentioned by Klaus Wohlrabe, might be linked to their business strategies, such as the implementation of community policies or employment policies, for attracting investments in real-estate and finance.
- In the context of Germany's construction sector, especially in Munich, the continued challenge in the order situation could potentially be eased by initiatives like state guarantees for financing new apartments, as proposed by the new Federal Minister of Housing, Verena Hubertz, as it could stimulate employment in the construction sector and support investment in the real-estate market.
