Construction industry - Forecasts: downturn in residential construction to continue in 2024
Economists and the construction industry expect a continuing downward trend in residential construction in the new year. The Munich-based Ifo Institute estimates that only 225,000 apartments could be completed in 2024, 45,000 fewer than last year. The two most important industry associations are also pessimistic: the Federation of the German Construction Industry and the Central Association of the German Construction Industry, even if the respective forecast figures differ slightly.
"We are looking to the coming year with concern, with the residential construction sector in particular clouding the outlook," said Tim-Oliver Müller, Managing Director of the German Construction Industry Association. "In view of the significant slump in incoming orders, it is likely to deteriorate further in 2024 compared to the previous year." The construction industry expects 250,000 homes to be completed last year and a further decline in the new year.
According to its Managing Director Felix Pakleppa, the Central Association of the German Construction Industry expects sales in the main construction sector to slump by 13% in 2024 and 235,000 new homes to be built.
DIW Berlin was less pessimistic in a report for the federal government published in December, predicting only a comparatively slight decline from 270,000 new apartments in 2023 to 265,000 this year. However, hardly anyone expects residential construction to recover virtually on its own in the next two years.
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- Despite the turn of the year, the pessimistic outlook for the housing construction sector persists in Germany, particularly in Bavaria's Munich.
- The construction industry in Germany is experiencing a descent, with forecasts predicting a continued downward trend in residential construction, including in famed cities like Munich.
- According to the ifo Institute for Economic Research, only 225,000 apartments might be completed in 2024, marking a 45,000-unit decrease from last year.
- The construction industry's real estate sector is bracing for the economic situation, as both major associations in Germany, the Federation and Central Association, anticipate a further decline in home completions.
- The Bavarian housing construction market may continue to struggle, as the construction industry's forecasts suggest a continuing downturn within the residential construction sector.
- The downward trend in the German construction industry's housing construction may present challenges for both the construction industry and the broader economy.
Source: www.stern.de
