- New building permits in the southwest continue to fall
The decline in the construction sector in Baden-Württemberg continues. From January to June, authorities approved around 3,200 new residential buildings and approximately 1,300 non-residential buildings such as offices and administrative buildings, according to figures from the State Statistical Office. In total, this amounts to over 4,500 new construction projects - around 28% fewer than in the already weak previous year.
The number of residential buildings approved for construction fell by more than 40% - from around 16,200 in the first half of 2023 to just under 9,600 in the current period. The number of new apartments approved for existing buildings or non-residential buildings is not included in the statistics. Previous statistics show that this was around a few thousand apartments per year.
The decline was already evident in 2023. In comparison to 2022, 35% fewer buildings were approved. The number of residential buildings approved for construction fell by around a third to around 28,600. This was the lowest level since 2010, in the midst of the economic and financial crisis. The numbers had already fallen significantly in 2022.
There has been a sense of alarm in the construction industry in the southwest for some time. Rising prices for materials and energy, as well as higher interest rates on loans, are currently making construction unprofitable for many clients. The industry association does not expect a quick recovery: the downturn continued unabated in June. There is no end to the crisis in sight, according to the association's CEO, Thomas Möller.
The industry association fears more insolvencies. It expects the economic pressure on construction companies to increase further. "The number of insolvencies and unemployment in the construction industry could rise again," said Möller. At the same time, housing shortages in major cities and metropolitan areas are expected to worsen in the future. Politics must intervene - above all by increasing state funding for affordable housing and reducing the real estate transfer tax. Bureaucratic hurdles must also be reduced.
In the construction industry, which the association represents in Baden-Württemberg, there were over 8,400 companies with around 115,000 employees in 2022. This includes companies that construct raw buildings.
Despite the ongoing challenges in the construction sector, some individuals may resort to unlawful means to meet their needs. This has led to an increase in reports of breaking and entering into unoccupied or abandoned buildings for the purpose of stealing construction materials. The increasing number of insolvencies in the industry could further exacerbate this issue, as desperate individuals may turn to breaking and entering as a means of survival.
