At first glance, it looks like good news: From January to November 2022, the construction industry in Hesse increased sales by 7.2 percent compared to the previous year.

However, this is only due to the increased material prices, said Frank Dittmar, President of the Hesse Association of Construction Entrepreneurs on Tuesday.

The number of hours worked fell by 6.5 percent over the same period.

For the first time in years, the number of employees fell slightly.

This is not the only reason why the construction industry is pessimistic about the future.

Energy prices, interest rates, a shortage of skilled workers and bureaucracy are depressing the mood.

The association expects demand for residential construction to fall by ten percent this year.

"Many construction projects are cancelled, large orders hardly come in," says Vice President Thomas Reimann.

The industry giant Vonovia, which is strongly represented in the Rhine-Main region, has just canceled all new construction projects for 2023.

Corona aid blocks investments

The slump in residential construction is hitting companies hard, as this segment has accounted for more than 40 percent of the order volume in recent years due to high demand, said Dittmar.

Smaller companies with up to 20 employees in particular would feel the slump.

Short-time work or even company closures are in the room.

This means that there is a risk that urgently needed skilled workers will migrate and that there will be a lack of capacity if the construction industry picks up again.

Other segments could not compensate for the decline in residential construction, said Dittmar.

In industrial and commercial construction, new orders fell by 26 percent in November, and the association expects a drop of four to five percent in 2023.

A decline of three to four percent is also expected for public building projects.

"The Corona aid has used up the money that would be needed for investments in the infrastructure," says Dittmar.

Politics should help

The construction industry is now hoping for help from politicians.

"Construction must be made easier," demands Reimann and would like the bureaucratic hurdles to be removed.

"We don't need 16 different building codes in 16 federal states." He also has in mind the requirement that applies in Frankfurt that investors in residential construction contribute to the costs of the social infrastructure.

"You could suspend this building land decision for two years and see how the market reacts."

However, according to Reimann, the development is going in exactly the opposite direction.

The federal government's recently reformed new construction subsidy means more bureaucracy instead of less.

In the future, the energy standard of a building project will have to be certified if it is to be funded.

"We are already desperately looking for energy consultants," said Dittmar.

The association hopes for the state elections in autumn, for which it has presented a list of demands.

At the top of the list: A separate ministry for construction and transport at state level.