The construction industry is showing a pessimistic outlook for the current year. The industry association HDB anticipates the loss of at least 10,000 jobs and expects that the housing construction targets set by the coalition government will be significantly missed.

Business expectations in the construction sector have been revised downward. Industry president Peter Hübner stated in Berlin that a revenue decline of four percent and the elimination of 10,000 jobs are projected for 2024. At the beginning of the year, the HDB had released a sales forecast of minus 3.5 percent. "We are in the fourth year of construction industry weakness," emphasized Hübner. "A turnaround is not in sight this year either."

Decline in Public Construction Expected
The causes of the pessimistic assessment in the construction sector mainly lie in public construction. Due to anticipated declining tax revenues, federal, state, and local governments are expected to reduce their investments in public construction projects. Instead of a slight increase, the HDB now predicts a decline of 0.5 percent.

Particularly in residential construction, there are currently significant weaknesses. Hübner made it clear that revenues in this area are expected to decrease by twelve percent, adjusted for inflation. The only exception is commercial construction, which is forecasted to see a revenue increase of 1.5 percent, driven by major contracts from Deutsche Bahn, power grid operators, and public transport services.

Foto: Rizos © 2024

Target of 350,000 New Homes at Risk

Current investments are crucial, according to the HDB. The employer-affiliated Institute of the German Economy (IW Köln) estimates that expenditures for housing construction must increase by about 20 billion euros per year, adjusted for inflation, to reach the levels of 2022. To meet housing demand, around 350,000 new homes need to be built annually until 2030. However, the industry is far from these goals. "In 2024, the number of completions could drop to below 250,000 units," the institute warned.

Call for Bureaucracy Reduction
The IW also identifies significant investment needs in the area of federal roads and highways. "Without improvements to infrastructure, Germany's competitiveness cannot be enhanced, and without additional investments in the building stock, climate goals cannot be achieved," explained IW study author Michael Voigtländer.

Association president Hübner calls on politicians to take action, as extensive bureaucracy poses a considerable hurdle for the industry. "No sector is as heavily regulated as construction: Diverse and constantly changing government regulations, outdated rules, and a hardly digitized public administration shape the situation." The IW also advocates for a loosening of building regulations to increase the industry's productivity, for example, through serial construction.

**About this topic reported Deutschlandfunk on June 4, 2024, at 1:36 PM.**