Germany: Construction companies complain about historical material shortages

Poor mood in the construction business: Delivery bottlenecks, shortages of materials and cost increases are plaguing the industry: According to the Ifo Institute, companies are experiencing a lack of materials like they have not been in 30 years.

Due to the constantly increasing shortage of materials and incalculable cost increases, the business expectations of German construction companies have fallen to a low point. In the monthly company survey published on Thursday by the Munich Ifo Institute, 54.2 percent of building construction companies complained about delivery bottlenecks.

That was more than ever since the surveys began in 1991. In civil engineering, 46.2 of the companies reported a lack of material, also a new high.

Accordingly, according to Ifo, business expectations in the construction industry have plummeted, in building construction the corresponding indicator of the institute fell to minus 46.9 points, the lowest level since 1991. In civil engineering it was even minus 48.6 points.

“New projects are hardly calculable”

The construction companies also reported an increasing number of order cancellations. In April, 7.5 percent of building contractors and 9.3 percent of civil engineers reported canceled orders, significantly more than in March.

“With ongoing projects, the question arises to what extent cost increases can be passed on,” said Ifo construction specialist Felix Leiss. “New projects are hardly calculable. On the other hand, interest rates for financing are rising for builders.”