German construction outlook deteriorates after already weak quarter

Orders at German construction companies in the first quarter were 18% lower than in the corresponding 2022 period, according to their association, Hauptverband der Deutschen Bauindustrie (Bauindustrie).

The year-on-year dip was especially pronounced for residential construction, at nearly 40%, which could not be balanced by commercial or public projects, says Bauindustrie managing director Tim-Oliver Müller. The drop in orders foreshadows a drop in revenue, which in the first quarter was already 8% down year-on-year.

Although the high order backlogs built up in previous years had a stabilising effect, these are melting down rapidly. “The traditional spring revival in construction has failed to materialise this year,” Müller says.

Companies were correspondingly pessimistic about the coming 12 months: 35% of the construction companies surveyed in a recent poll expected their business situation to deteriorate. House construction companies were especially pessimistic, at 43%. Only 8% of companies polled expected an improvement.

The lull in construction was an issue debated at Kallanish’s recent European Steel Markets conference in Amsterdam. “Our German customers in the construction market are very worried, and the Netherlands as well,” said Friso de Vries, managing director of Vogel Stahl, a distributor on the German-Dutch border.

A buyer at a rebar bending shop puts it more drastically: “I am not getting ‘few’ orders, I am getting none.” Consequently, he has suspended purchases of rebar for many weeks.

Christian Koehl Germany