Challenges in German Residential Construction

The German residential construction sector is facing significant challenges, as over half of the companies report a lack of orders, a situation that has worsened in recent months. According to a recent Ifo Institute survey, 53 percent of firms indicated insufficient demand, a rise from 51 percent in August.

Despite central bank interest rate cuts, private households continue to bear high borrowing costs, limiting any positive impact on the market. In September, only 11 percent of orders were canceled, yet the number of new orders declined more sharply than in the previous month.

Klaus Wohlrabe, the survey leader, cautioned against interpreting these trends as a sign of recovery, asserting that the overall situation in residential construction remains serious. While there is slightly less pessimism among companies regarding future prospects, the ongoing order shortage raises concerns for the industry's stability.

Additional discussions surrounding topics such as pension formulas and financial functions underscore the complexity of the economic landscape affecting construction.