Statistics - Tradespeople look to 2024 with concern: slump in construction
Thuringia's construction industry is facing difficult times. "I'm worried about 2024," said Thomas Malcherek, Managing Director of the Thuringian Crafts Association, to the German Press Agency in Erfurt. This particularly affects the large construction trade sector, to which around one in four companies in Thuringia belong. New construction projects by private and commercial clients and project developers have fallen dramatically, as has the number of building permits. "What is not approved now will not be built in the next few months."
The head of the Thuringian Housing Industry Association (vtw), Frank Emrich, also warned: "We will have a significant problem in the construction industry in the building construction sector in 2024, 2025 and 2026 if we don't change course quickly." Many companies are holding back on investments. For example, the residential construction companies in the vtw had originally budgeted 574 million euros for 2023 - but in the end, one hundred million euros less is expected to be spent. The companies also want to tackle the issue of new construction in 2024 and 2025, but with the handbrake clearly on, he said.
Malcherek pleads for more tax incentives for residential construction, which have already existed in the past. Today, investors are too rarely putting their money into the purchase and modernization of apartment buildings.
Slump in construction orders in spring
According to forecasts, there could be short-time working in the Thuringian building trade as early as Easter. "This is already a topic in the companies. There are no orders," said Malcherek. In his opinion, it is questionable whether the lowering of the real estate transfer tax in Thuringia from 6.5 to 5.0 will bring significant improvements to the order situation. The tax reduction was the right thing to do because Thuringia had a high tax rate compared to other federal states. In the medium term, it could make it easier financially for young families to build.
According to Malcherek, the foreseeably difficult situation could even lead to building tradespeople in their 60s retiring earlier and giving up their businesses. "One reason could be that losses are to be avoided and there is hardly any prospect of the business being handed over to a younger person anyway." Some businesses may just be downsizing.
Fewer orders, but still waiting times
This could lead to the paradoxical situation that clients would still have to wait until their requests are implemented. In recent years, clients have sometimes had to wait a long time for tradespeople to arrive because their order books were full.
According to figures released by the State Statistical Office on Thursday, incoming orders in the main construction sector recently slumped significantly. From January to October, around 148 million euros were received, around 34 percent less than in the previous year. Turnover fell by 13 percent to 206 million euros. The statisticians had recently reported a significant drop in building permits. Just under 2,000 permits for new-build apartments by October 2023 were the lowest level in 13 years, according to the report.
According to the Handwerkstag, there are currently around 29,700 craft businesses in Thuringia. With around 148,000 employees and around 6,500 young people in training, they are an economic heavyweight and an important employer. However, the number of businesses has been falling for years. "This will not improve in the future," said the managing directors.
Finishing trade with alternative options
The situation in the finishing trade is less tense than in the main construction trade, said Malcherek. There is still a better order backlog there, and the companies can also absorb some of it through modernization. In the heating, plumbing, flooring, painting, electrical, safety and control technology sectors, there are more alternative options for companies.
The situation in the automotive industry has been good so far. "Sales and repairs were very good in 2023." But there are also signs of weaker development this year. The short-term end to subsidies for e-cars has caused uncertainty. It is difficult to predict how private consumption will develop following the significant increases in income in some cases and possibly continued high inflation.
Read also:
- A clan member is punished here
- Traffic lawyer warns: Don't talk to the police!
- Will he be convicted as Jutta's murderer after 37 years?
- He also wanted to kill his cousin
- In Thuringia, various construction companies, serving as significant employers, are expressing concern about the future due to the ongoing slump in construction orders.
- The German Press Agency reported that Thomas Malcherek, Managing Director of the Thuringian Crafts Association, commented on a break-in in construction projects, affecting both private and commercial clients and project developers.
- Live from Erfurt, Malcherek advocated for reintroducing tax incentives for residential construction, which had helped in the past, to stimulate investment and attract investments to purchase and modernize apartment buildings.
- Despite the slump in construction, the State Statistical Office reported that waiting times for tradespeople in Thuringia remain, as fewer orders do not equate to a decrease in demand for their services.
Source: www.stern.de
