The mood in Germany’s residential construction sector has edged up at the beginning of the year. In January, the Ifo institute’s business climate index rose from -22.7 to -20.9 points, indicating a slight lift in confidence among firms.
Companies reported being a bit more content with their current operations, and expectations for the future have also brightened. “The construction industry remains on a holding pattern” said Klaus Wohlrabe, head of the Ifo surveys. “Until the increased number of housing‑building permits turns into actual orders, a lot of patience is required”.
Operationally, however, the impact has not yet been felt. In January, the share of construction companies saying they had too few orders rose from 47.7 % to 49.8 %. The proportion of firms reporting canceled projects stayed almost flat, only slipping marginally from 11.5 % to 11.1 %. Wohlrabe added that severe winter weather also curtailed building activity throughout the month.