The downturn in the German construction sector continues as rising prices, material shortages and economic uncertainty weigh on activity and sentiment. S&P Global notes that:
“Business conditions for construction companies in Germany remained challenging in May, with firms not only having to contend with long-running supply issues, but also a marked decline in new orders as economic uncertainty, sharply rising building costs and higher borrowing rates all serve to dampen demand.
“Building costs continued to skyrocket in May, with the rate of inflation in prices paid for materials and products creeping closer to last year’s record highs, and subcontractors also able to charge markedly higher fees. That’s despite construction companies reining in their labour requirements in the past couple of months, with a lack of availability of specialists in the market meaning they were still able to hike charges at a near record rate.
“Constructors are expecting these challenging conditions to persist in the coming year, leading to the gloomiest forecasts for future activity since the first wave of the pandemic more than two years ago.”