Housing construction companies in Germany are struggling with a sustained wave of cancellations. According to a survey by the Munich Ifo Institute published on Monday, more than one in ten companies (11.6 percent) reported in August that builders had withdrawn orders. Already in July there was a very similar picture. According to Ifo, the reason is the sharp increase in construction costs with high material and energy prices, higher interest rates and reduced government subsidies.

Accordingly, pessimism has spread in the housing construction industry, with many companies fearing worse business. "Companies still have bulging order books, but with a view to future developments, fear is spreading," said Ifo housing specialist Felix Leiss. The Ifo index of business expectations in residential construction fell to minus 48.3 percent. According to the Ifo, this is the lowest level since the monthly surveys began in 1991.

The delivery bottlenecks have therefore eased somewhat compared to July, but more than a third (36.4 percent) of the companies surveyed still complained about the shortage of material. According to the Ifo, many construction companies are planning further price increases. The survey was part of the institute's monthly business survey in the German economy.