Persistent High Costs for Building Materials Persist Through 2023 Amidst Construction Industry Crisis in Germany

Article ## Persistent High Costs for Building Materials Persist Throughout 2023 Amidst Construction Industry Crisis

In the midst of a deteriorating economic climate, Germany's construction sector is facing significant challenges according to data provided by Ifo Institute’s business sentiment indicator. January 2024 saw a decline in industry expectations to -50 points, falling below historic lows set during past crises caused by the COVID-19 pandemic and Russia's ongoing military aggression resulting from its energy crisis.

The Federal Statistical Office has also reported that both turnover and incoming orders in construction have shown negative trs. In November 2023, real figures showed a decline of -3.2 compared to the previous year for overall industry performance while new orders, a leading indicator, experienced a decrease of -2.7. This variance is reflective of divergent outcomes across civil engineering -6.1 and building construction +0.6.

The primary reasons attributing this downturn are elevated costs in recent years due to rising interest rates and increased material expenses, notably for cement +32 compared to 2022, limeburnt gypsum +32, metals overall -7.6, steel reinforcing bars specifically dropped by 29.6 and petroleum-based bitumen -4.9. Flat glass prices declined similarly to metals but remned above 21.1 relative to the 2021 level.

In contrast, solid structural timber -22.6, construction timber -18.1 experienced notable price decreases compared to their respective figures from last year and are now notably below pre-crisis levels of 2018 +12 for solid structural timber. Overall producer prices dropped by -2.4, but they're still nearly 30 above the same period in 2021 and an astonishingly high 43.5 compared to 2018.

These figures underscore the persistent challenges faced by Germany's construction sector, emphasizing the uring impact of economic fluctuations since the pre-pandemic era.

For further insights into macroeconomicused for climate change adaptation measures or consumption patterns urban vs rural areas, please refer to our recent articles.

Vocational trning was also discussed earlier in August when many commence their professional development journey, demonstrating the long-term benefits seen by those achieving qualifications through vocational routes.

In , while certn building materials witnessed a minor price drop, it is crucial to acknowledge that these costs remn significantly elevated compared to pre-crisis levels. This highlights the sector's need for comprehensive solutions and strategies to address economic challenges persistently.

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