Forecast or prediction - Construction industry in MV experiences mild growth.
Following a recent dip, the construction sector in Mecklenburg-Vorpommern seems to be making a comeback. The Landesbauverband in Schwerin reported that first-quarter sales for 2024 totaled almost 400 million euros, a significant 7.0% boost from the previous year.
One of the major contributing factors to this uptick was lucrative contracts in the public sector. With a third of the total sales being accounted for by this sector, it saw a significant 15.6% increase. Notably, road construction was the main driver behind this positive trend. In contrast, the residential construction market experienced mild growth of just 1.8%, while the struggling sector showed more promise in March. The commercial construction sector led the pack, contributing 162 million euros and marking a 4.0% increase.
Despite this seemingly positive news, Jörn-Christoph Jansen of the Bauverband MV cautioned against excessive optimism. "The construction market in Mecklenburg-Vorpommern hasn't fully recovered within the first three months of 2024," he stated. "This is evident from the decreasing number of building permits," he added, highlighting a 27.2% drop compared to the previous year.
The total value of new orders reached 328 million euros. "In the first quarter of last year, order intake plummeted by 22.9%, only to be marginally improved, not even after adjusting for prices," Jansen explained.
Despite the uncertain outlook, the industry is retaining its workforce. Around 10,700 people are currently employed in companies with more than 20 staff members, and an additional 20,500 people work for smaller businesses.
Over the past year, the construction industry in the northeast witnessed an overall increase of 2.2 billion euros. This jump is largely attributed to higher construction costs. However, taking into account inflation, it actually represented a 2.6% decline from the year before. Landesverbandspresident Thomas Maync called for more financial investments from the government into ailing infrastructure and urged for simplifications in building regulations and expedited approval processes. Adherence to funding program commitments from politicians should be maintained; any measures that lead to price hikes, such as toll hikes or CO2 taxes, should be avoided.
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The economic situation of the construction industry in Mecklenburg-Western Pomerania has shown an upward trend, with the industry reporting a 7.0% boost in first-quarter sales compared to the previous year. Associations like the Landesbauverband in Schwerin attribute this growth to lucrative contracts in the public sector, particularly in road construction. However, despite this positive development, statistics reveal a 27.2% drop in building permits, signaling a cautious outlook for the future. Despite the uncertainty, the construction industry in Mecklenburg-Western Pomerania continues to maintain its workforce, with over 31,200 people employed in both large and small construction companies.
