Economists warn that the German construction sector is still facing difficult times, despite promises of support and investment from the government.
"The latest data indicated that in May the number of permits for the construction of new buildings fell by 24.2% per annum and is almost 40% lower compared to May 2022. Thus, we see signs that the construction sector remains in a "deplorable situation," the ING economists said, adding that from January to May, the number of permits for the construction of single-family homes fell by more than 31% per annum, and permits for the construction of apartment buildings decreased by more than 21% per annum.
Experts from the Central Association of the German Construction Industry also pointed to the gloomy prospects for the construction sector, saying that the number of building permits in Germany has been showing a downward trend since April 2022.
Germany's housing and construction industry has been struggling for some time, with sentiment and expectations for the industry reaching an all-time low earlier this year. Broader economic trends such as inflation and high interest rates are putting a lot of pressure on the sector, and given that interest rates are unlikely to decrease significantly in the near future, problems such as construction costs and labor shortages will persist.