German construction crisis: consequences for the EU economy and possible solutions

German construction crisis: consequences for the EU economy and possible solutions

According to a report by www.hna.de,

The German construction crisis is dragging the entire EU economy into the basement. A 'perfect storm' of high construction prices and loss of confidence is rocking the industry, the Financial Times reports. The high construction costs, which have risen by 40 percent in Germany since the pandemic, combined with increased interest rates and the associated loss of investor confidence, have led to an incessant downward trend.

In addition, the German bureaucracy is described as inefficient and slow, which further exacerbates the situation. The crisis in the construction sector is seen as part of the overall economic problem that is currently plaguing Germany. Politicians have taken measures, but concrete measures are not expected to take effect until 2024 at the earliest.

Due to these circumstances, a slow recovery can be expected next year, especially through political measures such as an electricity package from the federal government. In addition, Chancellor Olaf Scholz is calling for a radical restructuring of construction policy in order to counteract the stagnating construction industry. All in all, the situation points to profound changes and a longer period of recovery for the construction industry.