German construction slows noticeably in September

Order intake in Germany’s construction industry in September was down 23% on the corresponding 2021 month, Kallanish learns from construction association Hauptverband der Deutschen Bauindustrie (Bauindustrie).

This marks an aggravation over August, when the association already lowered its forecast for full-year 2022, but the year-on-year dip was still only 5%. For the first nine months, the y-on-y dip is 7%, in nominal terms, as the figure is price-adjusted and does not yet consider cancellations that took place in the meantime, the association notes.

“The revenues in September were nominally still higher, but were eaten up in full, and beyond, by the price increases,” says Bauindustrie’s managing director, Tim-Oliver Müller. “In real terms, they sunk by 8% in September, and by nearly 5% in the first nine months. Lower demand is having a more and more negative effect on production,” he details.

In a poll carried out by the national trade and commerce chamber, 60% of construction companies expected a negative trend for their business in the next 12 months, while only 3% had reason to see an improvement. Müller has accused the government of stepping on the brake on infrastructure investment, which he says means a brake on the entire German economy.

Meanwhile, rebar prices appear to have relatively stabilised after they dropped by nearly €100/tonne ($103) in a matter of one week in early November. This brought the base price from domestic mills to €600/t, which plus the size extra of €265 translates to €865 delivered.

Sources say prices did not fall noticeably in the course of November and might remain sitting where they are, but could soften slightly more before the business year ends. “Mills might concede another €10-30, but not massively,” a northern German buyer says.

Christian Koehl Germany