Building materials in Germany are becoming more expensive again

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Loading of goods in a HeidelbergCement warehouse (picture from 2012)

Photo: Uwe Anspach/ dpa

Construction in Germany is becoming even more expensive: The prices for building materials rose in the first half of the year, in some cases massively. Cement, for example, cost 41.7 percent more than a year earlier, as the Federal Statistical Office announced on Tuesday. Significantly higher demand was also seen for other mineral building materials, such as lime and burnt gypsum (+39.7 per cent), roof tiles made of ceramic materials (+28.7 per cent), fresh concrete (+27.7 per cent), construction sand (+22.7 per cent) and mortar (+18.6 per cent).

The Federal Association of Independent Real Estate and Housing Companies (BFW) warned of a construction crisis of historic proportions in view of the cost explosion. "It has to be operated on, otherwise the patient will be dead," said BFW President Dirk Salewski. "Now it's time to get rid of all avoidable costs." To this end, the association proposes, for example, a reduction in VAT for residential construction, a uniform building code in Germany and simplified planning law.

Significantly more had to be paid for so-called building supplies made of plastic: sanitary equipment such as bathtubs or washbasins rose in price by 10.8 percent in the first half of the year, window or door coverings by 8.6 percent. On the other hand, the price of metal building materials, the production of which is comparatively energy-intensive like that of mineral building materials, fell by 4.6 percent in the first six months of the year.

"However, prices here developed inconsistently," the statisticians found. Reinforcing steel in bars, for example, cost 28.5 percent less than a year earlier, while steel pipes had to be paid 6.3 percent more.

Petroleum-based bitumen – which is used, among other things, in road construction and for waterproofing roofs, buildings and foundations – fell in price by 13.0 percent. There were also price declines for building materials made of wood: solid structural timber (-28.0 percent) and roof battens (-25.3 percent) were available at a lower price. Lumber cost 18.6 percent less.

Complaints about lack of orders are on the rise

Increased material costs, along with the fact that financing has become more expensive, are considered the main reason why residential construction is suffering from a wave of cancellations and a lack of orders. In September, 21.4 percent of companies were affected by cancelled housing construction projects – more than ever before since the survey began in 2012, according to the Ifo Institute.

"Many projects are no longer economically feasible due to higher interest rates and increased construction costs," said Klaus Wohlrabe, head of the Ifo surveys. Complaints about a lack of orders in the industry are also getting louder and louder: Currently, 46.6 percent of companies are affected, up from 44.2 percent in August. This is the highest level since March 2009, when the global financial crisis hit.

dab/Reuters