Less will soon be built in Germany. We can assume this if we look at a current statement and a statistical figure. Firstly, there was yesterday’s monthly publication of the ifo business climate index by the ifo Institute in Munich. As a final note in the headline publication, ifo also said something about the construction industry. Quote: “In the construction industry, the index has fallen again. This was due to more pessimistic expectations of construction companies. In contrast, they again assessed their current situation somewhat better“.
Well, at the moment the situation is still good, but expectations are pessimistic. This corresponds to the report from this morning from the Federal Statistical Office. Here they published the incoming orders for the construction industry for December. What the new orders are at the moment, that will be the real sales in perhaps six or twelve months. If the new orders are declining now, then in a few months’ time real sales will fall. And that’s exactly how things look at the moment. Because for December the statisticians report a decline in new orders (seasonally and calendar-adjusted) of 4.8% compared with November. That is a lot! In a more important year-on-year comparison with December 2018, it is a decline of 5.0%.
Bottleneck in capacities
In 2019 as a whole, new orders for the construction industry still rose by 3.2% compared to 2018. But the current trend is downward! Well, has the boom reached its peak? Have a look at what the Deutsche Bahn is supposedly trying to get going at the moment. And how, what, where the federal government and local authorities want to build all over. So what could be the reason for the decline in incoming orders? Are the craftsmen currently working to capacity and overworked to such an extent that they can no longer accept any new orders? Do they now have to work off full order books and supposedly large investment offensives are trickling away because there are no freely available craftsmen and construction capacities? In the following chart we see the orders received in the construction industry over the last ten years. Were the recent highs in new orders only peaks that were so extremely high that a downward correction is now necessary?