- The eastern German construction sector continues to experience elevated stress levels
For East Germany's construction sector, the economic landscape remains tough. The overall income and order volume took a slight dip in the first half of the year. The only bright spot was the economic construction sector, which experienced a modest revenue boost as per the East German Construction Industry Association. "The steep drop we noted at the start of the year, notably in requests for construction services, has merely moderated substantially by the end of the first half of 2024," they reported. "No recovery is on the horizon yet."
The total order volume for the first six months sat at approximately 9.5 billion euros, according to the association, representing a decrease of around 5% compared to the previous year, accounting for inflation.
The public construction sector was the only one to see a noticeable surge in demand. Here, the order value expanded nominally, neglecting inflation, by more than 10% to about 4 billion euros. In contrast, residential construction saw a 7.6% decrease in orders, nominally, to 1.3 billion euros.
The industry's state of affairs remains precarious when considering revenue as well. After accounting for price variations, revenue dropped by over 5% to 9.6 billion euros in the first half of the year. While revenue remained steady in public construction, it plummeted considerably in residential construction. Only the economic construction sector witnessed an uptick.
Additionally, analyzing the progress of building permits, the association determined that a reversal in the construction sector trend is unlikely in the immediate future.
Despite the overall challenging economy, the Potsdam Convention Center project saw an increase in construction activity, contributing positively to the economic construction sector's revenue boost. However, the demand for new building permits in other sectors suggests that a significant recovery in East Germany's construction sector, including The Potsdam, may not occur in the near future.
