High material costs and rising interest rates are weighing on the market.
(Photo: dpa)
Dusseldorf The critical situation in residential construction is solidifying: Due to high material prices and rising interest rates, an unusual number of residential construction projects are being canceled in Germany, the Munich Ifo Institute reported on Friday. The proportion of construction companies affected was 13.6 percent in January, after 15.9 percent in December.
Ifo researcher Felix Leiss, who regularly asks companies in the construction industry about this, said: “Although the cancellations are declining somewhat, the level is still exceptionally high.” For the companies, there are dark clouds on the horizon. “The business is still being supported by the high order backlog, but there is fear with a view to future developments in residential construction.”
As a result, business expectations fell again and slipped to their lowest level since the survey began in 1991: the corresponding barometer fell by 1.5 points to minus 63.1 points. “Expectations are at their lowest point, companies are expecting a significant slowdown,” said Leiss.
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