The construction industry has been suffering from a climate of uncertainty for years. This is putting pressure on the willingness to invest. The housing shortage was already a predominant issue at the time of the 2021 general election and still is. The new federal government faces major challenges in the area of construction and housing.
However, the mood among companies in the residential construction sector improved slightly in April. According to the ifo Institute, Munich, the business climate for this sector rose from minus 43 to minus 37.7 points. Both the current situation and the companies' expectations improved. "The mood in residential construction is brightening - albeit at a low level," says Klaus Wohlrabe, Head of ifo Surveys. "It is still uncertain whether the government's planned infrastructure package will have an effect. At the moment, companies are probably relying more on a general upturn in the construction industry."
The mood has improved, but the order situation remains difficult: 51.2 per cent of respondents report a lack of orders, compared to 53.7 per cent in March. Cancellations are also on the rise. In April, 10.4 per cent of companies reported cancelled orders, compared to 7.8 per cent in the previous month. The number of official building permits has also fallen again recently.
In March 2025, the construction of 19,500 flats was approved in Germany. According to the Federal Statistical Office (Destatis), this was 5.8 per cent or 1,100 more building permits than in March 2024. A total of 55,400 dwellings were approved in the first quarter of 2025. This was 3.4 per cent or 1,800 flats more than in the first quarter of 2024. These results include building permits for flats in new residential and non-residential buildings as well as for new flats in existing buildings.
The construction and housing industry has high hopes for the new Federal Minister for Housing, Urban Development and Construction, Verena Hubertz, and is hoping for a fresh start in housing construction. The coalition agreement shows the right first steps with building type E, a planned reform of the building code and a commitment to reducing bureaucracy.
Photo: © AG, Grabener Verlag, Kiel, 2025
