Housing construction booming despite Corona
In May 2020, the construction of a total of 32,000 apartments was approved in Germany. According to provisional data, the Federal Statistical Office (Destatis) further reports that this was 3.9% more building permits than in May 2019. The figures include building permits for both new buildings and for construction work on existing buildings.
The number of building permits is an important leading indicator for estimating future construction activity, as building permits represent planned construction projects. However, the number of construction projects that have not yet been started or completed (the so-called construction backlog) has been increasing for several years.
Despite the promising figures, however, the continuing shortage of skilled workers is slowing down the construction industry. The trade union IG BAU points out that in Munich, for example, many vacancies in the construction industry remain unfilled at the employment office for more than 90 days. It is becoming more and more difficult to find personnel, the union said. Wages and working conditions in the construction industry must therefore become more attractive.
However, construction costs have already risen significantly. Services that are rendered in the second half of the year could possibly benefit from the lower VAT since the beginning of July, if craftsmen pass on the tax cut.