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Construction industry facing capacity collapse: Sparkasse president warns of dramatic decline in new business and risks for banks.
According to a report by finanzmarktwelt.de, new business in the construction industry is declining sharply in Germany. In September, new business in the construction industry fell by 7.3% compared to the previous month. The president of the savings banks warns of a resulting drop in capacity in the construction industry, which could slow down the volume of new construction in the future. He also sees risks in the banks’ construction loan business. Such a slump in the construction industry could lead to a reduction in capacity, which would jeopardize the federal government's goals for housing construction. If jobs are eliminated due to low utilization, these employees could be permanently lost, jeopardizing the future of new construction volumes. In addition, there could be a…
Construction industry facing capacity collapse: Sparkasse president warns of dramatic decline in new business and risks for banks.
According to a report by finanzmarktwelt.de,
New business in the construction industry is declining sharply in Germany. In September, new business in the construction industry fell by 7.3% compared to the previous month. The president of the savings banks warns of a resulting drop in capacity in the construction industry, which could slow down the volume of new construction in the future. He also sees risks in the banks’ construction loan business.
Such a slump in the construction industry could lead to a reduction in capacity, which would jeopardize the federal government's goals for housing construction. If jobs are eliminated due to low utilization, these employees could be permanently lost, jeopardizing the future of new construction volumes. In addition, a decline in banks' construction loan business could have a negative impact on financing options for new projects.
The article also mentions that the Baden-Württemberg savings banks have recorded a sharp decline in loans for private residential properties. This suggests that the slump in new business could have a long-term impact on earnings figures. Housing prices have also fallen, and if low demand continues, further price declines could be on the horizon.
In view of this development, government funding programs should be created and the requirements for construction projects reduced in order to support the construction industry. Likewise, measures such as a reduction in real estate transfer tax in certain cases or the possibility of deducting real estate interest from taxes could improve the situation.
Overall, it can be stated that the current situation in the construction industry is critical and measures to support and stabilize the sector are necessary in order to prevent a possible collapse in capacity and an impending crisis.
Read the source article at finanzmarktwelt.de