Construction association complains about lack of orders
According to the Mecklenburg-Vorpommern Construction Association, higher revenues as a result of drastically increased construction prices are masking the increasingly critical situation in the construction industry. It is true that the turnover of construction companies in the state in the first eight months was above the level of the same period last year. However, when price increases are taken into account, a slight decline was recorded. A similar picture emerged for incoming orders in the period from January to August.
"The construction industry in Mecklenburg-Vorpommern is in crisis," stated Jörn-Christoph Jansen, Managing Director of the association, referring to the latest data from the federal and state statistics offices. High interest rates for construction loans and construction prices remaining at a high level are noticeably slowing down the economy. "Our member companies are already seeking advice on short-time work in early fall," reported Jansen.
A drop of 19.3 percent in building permits compared to the same period last year is a clear sign that it is not just residential construction that is affected. However, the construction of new apartments remains the problem child. A nominal drop in turnover of 9% in August is evidence of the negative trend that has been ongoing for some time. From January to August 2020, for example, turnover in residential construction totaled 325 million euros, according to the construction association. This year, the figure was 299 million despite higher prices. At 1.3 billion euros, total turnover was above the comparable figures from previous years thanks to growth in commercial and public construction.
Jansen called for state economic aid. "The state politicians must seize the opportunity of a housing construction summit and provide construction policy impetus," he said. The Association of North German Housing Companies (VNW) had also previously called for an increase in public funding for housing construction.
According to the Ministry of Construction, the state government only increased funding for new housing construction in September. This means that 95 million euros are available this year to create living space for families with low and medium incomes. So far, applications for around 65 million euros have been submitted. "This means that we have a very good level of applications for new builds, which shows that our funding conditions are attractive under the current conditions," said State Building Minister Christian Pegel (SPD). For 2024, a similar amount of federal and state funding would be made available for new construction, modernization and young housing.
"The level of public contracts will also remain high in the area of urban development funding. The state, local authorities and federal government are staying on the ball together in this area," Pegel assured. According to statistics, public sector contracts worth 458 million euros were received by construction companies up to August, an increase of 9 percent. On Friday, the state and local authorities announced their intention to make at least 400 million euros available for the construction and renovation of schools in Mecklenburg-Vorpommern over the next four years.
The Construction Association's concerns about a lack of orders are not just limited to residential construction, as statistics show a 19.3% decline in building permits in the same period. Despite higher prices, a slight decrease in turnover was recorded for construction companies in Mecklenburg-Vorpommern when accounting for price increases, reflecting the challenges in the construction industry.
Source: www.dpa.com
