Housing Optimism Plummets to -26.3 Points in August
In a recent statement, Klaus Wohlrabe, head of Ifo surveys, highlighted ongoing challenges in Germany's housing construction sector. The sector's improvement, which had shown a cautious uptick in recent months, has taken a break, Wohlrabe said.
The Ifo Business Climate Index for housing construction decreased from -24.2 to -26.3 points in August, indicating a worsening of the sector's current situation. Companies continue to grapple with weak demand, according to Wohlrabe.
The level of order cancellations in housing construction has increased, with the cancellation rate rising from 8.2 to 8.5 percent. This indicates a slowdown in the sector, as companies struggle to secure and maintain orders.
Despite a slight decrease, the level of order shortages remains high, with 45.7 percent of companies reporting order shortages in August, down slightly from 46.1 percent in the previous month.
Wohlrabe advised the sector to remain patient, as it will take some time for the increase in building permits to be reflected in order books. He also mentioned that the intended political measures have had little effect so far.
The government responsible for the political measures in the construction industry is the coalition government formed by CDU/CSU and SPD in Germany. The measures, aimed at stimulating the sector, have yet to show significant results.
The companies' assessments of the current housing construction situation have also worsened, with Wohlrabe's statement indicating ongoing challenges for the sector. Additionally, the companies' expectations for the coming months have deteriorated, suggesting a continued struggle for the sector in the near future.
However, there is still room for improvement in housing construction loans, according to Wohlrabe. He did not elaborate on the specific areas for improvement but encouraged the sector to remain patient and resilient in the face of these challenges.
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