The construction industry is preparing for short-time work due to the ongoing shortage of materials and rising prices.

The situation has continued to deteriorate over the past two weeks, says Tim-Oliver Müller from the German Construction Industry Association (HDB) of the FAZ. "Meanwhile, almost every company is directly or indirectly affected by the consequences of the war." "The air is getting thin to achieve the federal government's goals in housing construction and transport".

Bernd Freytag

Business correspondent Rhein-Neckar-Saar based in Mainz.

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The image of the construction industry joins a whole cascade of gloomy reports: a few days ago, the association of north German housing companies warned that the construction of several thousand affordable apartments was on the brink.

It is impossible that the number of new buildings proclaimed by politicians can be achieved.

The Munich Ifo Institute also reported on Friday about increasing delivery bottlenecks and price increases in construction.

Carpentry and timber construction work cost a third more.

According to Müller, the construction industry association has surveyed its member companies for the second time since the outbreak of war and received dramatic answers.

90 percent of those surveyed complained about price increases for building materials, 80 percent about delivery bottlenecks.

Bitumen, asphalt, wood, cement, concrete, sheet piling, even parquet would become scarcer and more expensive.

According to Müller, 40 percent of structural steel has so far come from Russia, Belarus and the Ukraine, and parquet flooring is “hard to get any more”.

30 percent of orders canceled

Because material is no longer available or because they are simply hoping for falling prices, 40 percent of customers have now postponed orders, and 30 percent have even canceled them completely.

The situation is absurd: weeks ago, the industry was still desperately trying to find workers, "today we have to think about how we can keep the ones we have." According to Müller, the association is preparing for the fact that companies will soon have to register short-time work .

The need for advice has increased significantly in recent days.

Federal Labor Minister Hubertus Heil has already announced that the current short-time work scheme will be extended until September.

This is a step in the right direction, says Müller.

At the same time, he called for the federal government to take over social security contributions in the future.

Should some companies not survive the crisis, the situation on the already tense market would worsen later and the expansion targets would be endangered.

The record high order backlog is now more of a burden than a buffer.

After all, no one can say whether the orders can even be carried out cost-effectively given the current supply and price situation.

Building will be expensive for the state

In order to defuse the situation, he says, the municipalities – the most important clients in the industry – must also accept the price escalation clauses recently agreed with the federal government.

In the case of federal construction projects, the industry has achieved that the material prices in current and new contracts can be renegotiated.

There are also corresponding signals from the countries.

According to Müller, the major clients for the construction industry, the Bahn and the federally owned Autobahn GmbH, have accepted a similar, albeit weakened, regulation.

Either way, the companies would have to bear a considerable part of the additional costs.

But it is also clear that construction will definitely be more expensive for the state.

According to Müller, the municipalities refuse to accept corresponding renegotiations or sliding clauses in new contracts.

85 percent of the construction companies already reported that their suppliers only accept prices that are updated daily.