Order Shortage in Residential Construction in Germany Eases Slightly

The order shortage in residential construction in Germany has eased slightly, as reported by 50.2% in June, down from 51.7% in May. “The lack of new orders continues to be a major problem. House builders are cautious, partly because the European Central Bank’s key interest rate cut is only a first step for the time being. Not much has changed as yet with regard to financing costs, as is also reflected in the trend in building permits,” says Klaus Wohlrabe, Head of Surveys at ifo.

“Anything that isn’t commissioned and approved today cannot initially be built either,” he adds. Companies are therefore likely to be faced with the issue for quite some time to come.” The cancellation rate for orders also fell slightly from 15.1% in May to 13.7%. Although the business climate in residential construction improved somewhat, it is still clearly in negative territory at -44.3 points. “The industry is still far from optimistic,” adds Wohlrabe.