At the beginning of the new year, the East German construction industry faces a whole "cocktail of crises". The mood in the industry is correspondingly depressed, said the general manager of the Construction Industry Association East (BIVO), Robert Momberg. According to a lightning survey by the association, almost 70 percent of companies expect lower sales in 2023 than in the previous year. At the beginning of 2022, on the other hand, less than 50 percent of those surveyed had expected falling sales.

"We currently have a negative dynamic," said Momberg. In the first nine months of 2022, incoming orders (up 13.1 percent compared to the same period of the previous year) and sales (up 9.7 percent) of eastern German construction companies increased. At the same time, however, the already high construction prices after Corona went up again after the outbreak of the Ukraine war.

"This means that our companies are not making any more sales in real terms, only the orders are becoming more expensive." The difference between the nominal, i.e. not price-adjusted, and the real turnover has never been such a big issue as it is now.

Inflation is particularly problematic in residential construction. Interest rates have risen significantly compared to the previous year. "It's not just private home builders who are giving up their projects because of this. Investors are also holding back in view of the rise in interest rates," said Momberg. According to information from the Federal Statistical Office, to which the association refers, at the end of 2021 construction financing with a ten-year fixed interest rate was still available for 1 percent, in September 2022 it was already 3.11 percent.

In addition, the high material prices made house and apartment construction more expensive. According to the association, new building prices in eastern Germany rose by almost 20 percent compared to the third quarter of 2021. Managing Director Momberg therefore sees the federal government's goal of building 400,000 new apartments a year throughout Germany as a long way off.

The building association appeals to private and public clients to distribute the risks involved in construction fairly. "Building in partnership" is now the order of the day, said Momberg. It is of no use to anyone if one unilaterally burdens the construction companies. If construction companies now had to reduce the capacities built up in good economic years, there would be a lack of specialists in the industry when the situation eased up again.

The East Construction Industry Association represents the interests of 260 construction companies with around 20,000 employees in Berlin, Brandenburg, Saxony and Saxony-Anhalt.