Construction Industry Running on Full Capacity

High demand for residential properties puts construction companies in an optimistic mood. In order to meet the needs further however, representatives call for law changes.

Also in the coming year, there’s plenty to do on the construction side. (Image: Pexels.com)

In their coalition agreement, Union and SPD contracted to promote the construction of 1.5 million new flats till 2021. But the construction industry can barely meet the demand. For instance, 375,000 units per year would be required in order to reach the target they agreed on. But despite ongoing increases, they seem far off. 285,000 flats have been constructed in 2017, while this year, they were 300,000. For 2019, up to 320,000 new buildings are reckoned with.

This affects the construction industry itself in a positive way. Higher prices for construction materials like bitumen or reinforced steel have barely an effect on the order situation of singular construction companies. Their opening balance lied 14 percent higher in September when comparing it to the previous year, which leads to a value of 47.6 million euro. There’s also a higher employment rate: In 2018, staff numbers raised up to 832,000, while for the coming year, 18,000 more workers are to be expected. However, developers will have a tougher time. Firstly, prices raised by 4.5 percent (previous year: +3.6 percent) and secondly, companies lack capacities in order to even issue enough offers.

In order to seize the full potential, the industry demands further tax cuts, but also better conditions for building. Among these is not only more affordable construction land, but also the conception of specific pre-designed houses, which get developed and approved only once, but can be built several times.

Whether with or without tax cuts: The construction industry can look ahead positively. For 2018, construction associations expect a rise in sales by six percent, which equals 1.5 percent after price adjustment. And for 2019, associations predict a plus by six or one percent respectively.

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