- The Ifo Institute‘s confidence index for residential construction fell to -47.9 points in August from -46.4 in July.
- Half of the surveyed companies expect a pessimistic outlook for the coming months.
- Order shortages slightly improved, affecting 50.6% of companies in August, down from 51.3% in July.
Munich, 9 September (FinanceFlashNews) – The business environment in Germany’s residential construction sector continued to deteriorate in August, according to a survey by the Ifo Institute. The confidence index in the construction sector dropped to -47.9 points, down from -46.4 in July. The results reflect ongoing challenges in the sector, with half of the companies expressing a pessimistic outlook for the months ahead.
Klaus Wohlrabe, head of surveys at Ifo, stated that the “crisis in residential construction will persist for a long time.” One positive note, however, was a slight reduction in order shortages, with 50.6% of companies reporting order deficits in August, compared to 51.3% in July. This marked the ninth consecutive month where more than half of the companies reported a shortage of orders.
Moreover, the rate of canceled contracts has continued to decline for the sixth consecutive month, with 11.7% of firms reporting cancellations in August. Companies in the sector are increasingly looking to compensate for the residential construction crisis by seeking orders in the road construction sector, according to Wohlrabe.
Keywords: German construction, Ifo Institute, residential construction, business sentiment, order shortages
