Mr. Hübner, is the construction boom over?

Bernd Freytag

Business correspondent Rhein-Neckar-Saar based in Mainz.

  • Follow I follow

The companies are worried.

But luckily it's not as bad as we feared three months ago.

Why?

A lot is coming together at the moment.

The extremely increased material prices, the rising interest rates.

However, our biggest worries were somewhat muted because the federal government has allowed so-called price escalation clauses for old orders.

That means?

The construction industry can subsequently pass on higher energy and material prices in ongoing contracts with the federal government, which helped us a lot.

Take a concrete example: you need 5,000 tons of steel, you budgeted 650 euros for one ton in the tender, but now you have to pay 1,400 euros.

This would not be possible without escalator clauses.

Now the state, as the client, is taking on all the additional costs?

The federal government assumes at least part of the costs, the states are only gradually following suit.

But of course we can't increase all prices in the offer, that is specifically specified and must also be proven, for example for steel, diesel, bitumen or asphalt.

How much more expensive are bridges and roads now for the state?

We are assuming price increases of 20 percent this year, compared to seven percent last year.

And if the material prices fall again, does the sliding clause also apply vice versa?

Yes of course.

This is fair game.

Do you expect further price increases?

We hope that the peak of material prices is behind us.

What exactly is still tight?

In turnkey construction, it is primarily digital components.

There are definitely delivery problems.

And classic building materials?

They are no longer a big issue at the moment.

Perhaps they have never been as big an issue as some have thought.

Why?

In surveys, many companies have spoken of problems in the supply chain.

However, if you took a closer look, it was because the standard supplier had failed, so the search had become more tedious.

If a required chip is still in Shanghai, there is a delivery problem.

If the formwork wood is with the supplier, but costs three times as much, then there is a price problem, that's another topic.

Is building cheaper again?

That is hard to say.

The supply chains are indeed disrupted.

But in some areas we are seeing increased speculation, which doesn't exactly make our work easier.

Let's take a look at the high price of diesel, which has had nothing to do with the price of crude oil for a long time.

The construction companies can only look on in shock at this price explosion.

But do the high oil prices hit you that hard?

Almost every construction machine runs on diesel.

In civil engineering, you need around one liter of diesel for every cubic meter of soil moved - at Strabag that's around 40 million liters a year.

This is no small matter.

And we have absolutely no influence on that.

Where do you notice the order holding back most?

Especially in private housing;

large housing associations are also stepping on the brakes there.

We notice that clearly.

Fortunately, the federal government is continuing to invest to the planned extent.

And the municipalities?

We are already feeling a certain reluctance there, and a bare number covers this: the German Association of Towns and Municipalities expects an investment deficit of 5.8 billion euros by 2025. I can only express the hope that politicians will counteract this and that the financial situation of the municipalities further strengthened.

In view of the investment backlog, it is urgently necessary to discuss a new municipal investment pact.

Because as the backbone of our society, it is the municipalities that shape the lives of the local people and provide important infrastructure - from schools and medical centers to roads for public transport.

It's shocking how many green bridges we are retrofitting on motorways so that a deer can walk over them, which maybe doesn't even exist there anymore,

If you take all the customers together – state, private, companies – is the order backlog in the construction industry already shrinking?