Bavaria’s construction companies are struggling with several problems at the same time: order cancellations, poor economic prospects, a shortage of skilled workers, rapidly increasing costs. The good news: there are no job cuts in sight, on the contrary.
Munich (dpa / lby) – Bavaria’s medium-sized construction companies want to create new jobs despite difficult times. This was announced by the President of the State Association of Bavarian Building Guilds (LBB), Wolfgang Schubert-Raab, on Monday in Munich. Although many companies expected sales to drop in the coming year, they continued to hire new employees. “In my opinion, the increase in employment will continue,” said Schubert-Raab. At the end of October, almost 173,600 people worked in the industry, almost 43,000 more than ten years ago.
The business prospects are currently rather bleak. Schubert-Raab expects sales to fall by seven to eleven percent in the coming year. According to the association, housing construction will have to put up with a particularly hard setback. But the number of public construction contracts is also declining. Regarding the announcements by the federal and state governments that they did not want to save on construction, the head of the association said: “There is a very clear lack of implementation.”
A decline in sales of up to eleven percent would probably mean an even greater decline in the real construction business. Because otherwise sales will increase this year solely because of the high inflation, even if the actual construction work on new houses, roads and residential buildings should stagnate or decline.
According to Schubert-Raab, the Bavarian construction companies have already increased their prices by 25 to 30 percent this year. According to the State Statistical Office, sales in the Bavarian construction industry in September were nominally 7.6 percent higher than a year earlier. The main construction trades do not include the craftsmen who remove the building shells, such as electricians, plumbers, roofers and fitters.
There are still quite a few building owners who are canceling orders that have already been awarded because of the rapidly increasing costs. According to the Ifo Institute, 11.3 percent of construction companies nationwide reported canceled orders in October. “In view of the often hardly calculable construction costs and rapidly increasing interest rates, many builders throw in the towel,” said economist Felix Leiss. According to the Ifo, there are particularly many cancellations in residential construction.
