Shining a Bit Brighter: A Mixed Bag for Residential Construction
Housing market mood is on the upswing, though the order situation remains challenging - Persisting Challenges in Streamlining Housing Construction Material Deliveries
Listen up folks, the residential construction sector is seeing some sunshine peek through the clouds, but don't start popping Champagne just yet! As Klaus Wohlrabe, big cheese of Ifo surveys, puts it, the mood is picking up - or at least that's what the companies in this industry are whispering into his ear. They're feeling a tad more optimistic about the current situation and the future financial landscape, though whether the government's proposed infrastructure package is kicking in, well, that's still murky water.
Now, let's talk about the gritty reality: the order situation is as tense as a cobra ready to strike. Yep, more than half of the companies (51.2%) are reporting a big, fat LACK of orders; that's down a smidgen from 53.7% in March, but still, it's a gut-wrenching stat. What's more, those cancellations? They're on the rise, ain't nobody got time for that! 10.4% of companies are dealing with cancelled orders, and that's an increase of 2.6 percentage points from the previous month.
Let's look to the future: later this week, Germany's fresh-faced Federal Minister of Housing, Verena Hubertz (SPD), will be strutting her stuff in the Bundestag, sporting her vision for the sector. In a sneaky-peek interview with "Zeit Online" beforehand, she hinted at state guarantees to help finance new apartments.
The traffic light government's forerunners promised to build 400,000 new apartments yearly, but that number doesn't pop up in the coalition agreement between CDU, CSU, and SPD.
- Perking Up Slightly
- Construction Sector
- Germany
- Munich
- Ifo Institute for Economic Research
- Klaus Wohlrabe
- Order Situation
- Future Outlook
- Government Infrastructure Package
- State Guarantees
(Enrichment Insights: The current order situation in residential construction in Germany is challenging, with 57% of companies reporting a lack of orders in January 2025 - a record high[1]. This trend has eased slightly by May 2025, but the situation remains tense[1]. The Ifo Institute, unfortunately, does not provide detailed regional data for Munich within its general reports. The evolution of the order situation has been influenced by economic conditions and policy changes, with the European Central Bank's interest rate decisions not yet significantly alleviating the situation[1] )
- Amidst the challenging order situation in the construction sector in Germany, with a record high of 57% of companies reporting a lack of orders in January 2025, the government is considering employment and community policies to alleviate the economic strain, possibly offering state guarantees to finance new apartments as proposed by the Federal Minister of Housing, Verena Hubertz.
- In light of the lack of orders in the residential construction sector, the traffic light government is weighing the possibility of providing financial support through employment and community policies, such as state guarantees, to facilitate the construction of new apartments in an effort to meet the promise of building 400,000 new apartments yearly.
