Construction sector

The industry is dominated by pessimistic forecasts for the next 12 months

The volume of orders of German construction companies in the first quarter of 2023 fell by 18% y/y. This is evidenced by the data of the industry association Hauptverband der Deutschen Bauindustrie, reports Kallanish.

As the managing director of the association Tim-Oliver Muller noted, the drop in the volume of orders in residential construction in January-March amounted to almost 40% y/y. This indicator could not be balanced by commercial or public projects. Revenue in the construction sector in the first quarter of 2023 fell by 8% year-on-year.

The large volumes of orders accumulated in previous years did not have a stabilizing effect either. In 2023, the country did not experience the traditional spring revival of construction.

German companies are pessimistic about the prospects for the next 12 months. According to a recent survey by the Association of German chambers of industry and commerce (DIHK), 35% of construction firms expect the business situation to worsen. This forecast was shared by 43% of housing construction companies. Only about 8% expected an improvement over the period.

As GMK Center reported earlier, the production in the construction sector of the European Union in March 2023 decreased by 1.2% compared to the same period in 2022, according to Eurostat data. Compared to February 2023, in March, seasonally adjusted production in the EU construction sector decreased by 1.9%. In the first quarter of 2023, production in the construction sector of the EU increased by 0.4% compared to the same period.

Also, EUROFER predicts that in 2023 the volume of construction in the EU will decrease by 1.6% and will recover to 1.3% in 2024. In 2022, the volume of production in the construction sector of the EU increased by +4.8%.