Analysis of incoming orders in the German construction industry: Why the decline is moderate despite the crisis

Analysis of incoming orders in the German construction industry: Why the decline is moderate despite the crisis

According to a report by finanzmarktwelt.de,
Incoming orders in the German construction industry fell massively by 7.4% in November compared to October, according to the Federal Statistical Office in its statement today. A closer look at the chart shows that incoming orders have been falling steadily since 2010. Orders in the construction industry had already collapsed massively last year. As a result, November 2022, as a comparison month for November 2023, was already at a very low level and the declines may now be relatively moderate.

How can the development of incoming orders in the construction industry be analyzed since 2010? The index was 116.8 points in November 2020 and 108.6 points in November 2021. Then in November 2022 it was a decrease to 94.8 points, and in November 2023 it was a smaller decrease to 92.2 points. If you take the month of November 2019 with 123.9 points as a comparison month to see how the construction industry has developed from shortly before the Corona outbreak to today - then incoming orders have so far fallen by 31.7 points or 25.6%.

This development in the construction industry may have an impact on the entire financial market. Falling new orders could lead to a decline in construction investment, which in turn limits construction activity and could potentially lead to job losses. This, in turn, could impact the entire economic sector and contribute to an overall decline in economic activity.

The decline in construction orders could also have an impact on the share prices of construction companies, as investors may have less confidence in these companies due to weaker orders. This could lead to a decline in market values ​​and returns, which in turn could impact the financial market as a whole. It is important to keep an eye on developments in the construction industry and consider possible strategies to diversify the portfolio.

The current situation in the construction industry highlights the need to keep an eye on economic developments outside of the financial sector in order to make well-founded financial decisions.