The mood within the German housing construction sector has recently worsened. According to the Munich-based Ifo Institute, the business climate saw a slight decline in May, falling from -28.2 to -29.3 points.
Companies assessed their current situation as slightly poorer, although expectations showed only marginal improvement and remain heavily characterized by pessimism. Klaus Wohlrabe, head of the Ifo surveys, stated, “Housing construction is stuck in a phase of uncertainty. Many companies currently do not anticipate a noticeable revival in the market.”
While the order situation did improve slightly-the percentage of companies reporting insufficient orders dropped from 43.8 percent to 42.2 percent-the number of cancellations simultaneously increased, moving from 10.8 percent to 11.7 percent. Concerns regarding material supply also persist, with 9.7 percent of companies reporting shortfalls in key precursor products. Wohlrabe noted, “Companies are receiving slightly more orders again, but customer uncertainty remains high. This is particularly evident in the rising cancellations.”
