The consequences of the Ukraine war are also making themselves felt on German construction sites: the shortage of materials is greater than ever. High energy costs and scarce raw materials are also driving up material prices, which is why there are more and more order cancellations, especially in residential construction.
Steel, insulating materials, bricks: The scarcity of materials on German construction sites is greater than ever. In building construction, 56.6 percent of the companies complained about shortages in May, in civil engineering it was 44.8 percent. “Never before has so much material been missing from construction,” said the Munich IFO Institute, summarizing the results of its monthly survey. Of these companies, 91.1 percent reported that the war in Ukraine had exacerbated material shortages.
“With the Russian attack on Ukraine, the supply problems for building materials have worsened drastically,” said IFO researcher Felix Leiss. Material prices continued to rise as a result of scarcity and higher energy costs. “Due to the rising construction costs and higher interest rates, there are now more and more order cancellations, especially in residential construction,” said Leiss.
Structural steel, which often has to be imported from Russia or the Ukraine, is particularly scarce at the moment. There are also problems with bitumen. “In some places, companies also complained about a shortage of bricks,” said Leiss. “Even before the war began, insulating materials were scarce in many places, but the situation has continued to deteriorate here, too.”
Scarce materials and high energy costs drive up prices. The companies, in turn, pass the price increases on to the builders: In building construction, the majority of companies reported that they had recently adjusted prices upwards. Further price corrections were very often planned for the coming months. According to the IFO Institute, there were also increases in civil engineering in many places, although not quite as frequently as in building construction.
The combination of rising construction prices and higher financing interest means that the first projects are becoming unprofitable: In May, 13.4 percent of building contractors reported cancellations, in April it was 7.5 percent and in March 4.6 percent. In civil engineering it was 8.8 percent, after 9.3 percent in April. “Overall, however, the order books are still bulging,” say the Munich researchers.
