Germany’s construction companies are pessimistic in their mid-term outlooks, expecting business to weaken further in the second half of the year, says association Hauptverband der Deutschen Bauindustrie (Bauindustrie).
It cites a poll in which 39% of all construction companies surveyed anticipate negative development. When asking residential construction companies, that number rises to 57%. That segment has been hit the hardest by inflation and rising interest rates, with many projects stopped or suspended, Kallanish understands.
The association reports some success for public construction/civil engineering, for example for railway projects, but not enough to make the overall picture rosier.
Nominal revenue in April was still slightly positive (+2.7%) year-on-year, but due to rising costs, real revenue was down 10.8%. Order intake fell by the same degree, and again more severely for residential construction, by 29.8%. Bauindustrie notes this is the 13th consecutive month of decline.
According to a manager at a big rebar distributor with activities in neighbouring countries, the construction economy in Germany is suffering even worse than in France, Spain, Italy or Poland.
On the intake side, mills’ base prices for rebar have sunk to around €330/tonne ($369), which plus the size extra of €265 would give €595/t delivered. Scrap prices have fallen accordingly, but not to the degree of the final product. Many therefore believe rebar prices have bottomed as mills will be unable to bear any further drops.
Christian Koehl Germany