Economic Sentiment in the Construction Sector Shows Signs of Improvement in May
According to the Munich Institute, the Ifo business climate index for the construction sector rose to -31.5 points in May, a significant improvement from the previous month’s -37.2 points. Both the current situation and the expectations of companies in the sector have shown a notable improvement.
“The companies in the construction sector are cautiously optimistic” said Klaus Wohlrabe, head of the Ifo surveys. “While the mood has brightened, the road back to normality is still long.”
Although the order situation remains tense, with 51 percent of companies reporting a lack of orders, a slight decrease from the previous month, the trend of cancellations has improved, with only 8.6 percent of companies reporting cancelled projects in May, compared to 10.4 percent in April.
“The increased number of building permits in the first quarter is a small glimmer of hope” said Wohlrabe. “Whether the trend will succeed, depends on whether the promised housing construction boost of the new federal government is implemented and takes effect.