Financial expert analyzes: Economic crisis in the Tyrolean construction industry - bankruptcies increase by 16 percent

Financial expert analyzes: Economic crisis in the Tyrolean construction industry - bankruptcies increase by 16 percent

According to a report by tirol.orf.at A visit to a construction site in the east of Innsbruck reveals the current challenges facing the construction industry in Tyrol. The managing director of a company in Zirl notes that orders in residential and building construction have fallen by around 30 percent compared to the previous year. However, there is increased demand in the renovation sector, especially for thermal renovations and the installation of photovoltaic systems.

According to an analysis by the credit insurer Acredia, the construction industry throughout Austria is at a low point. From January to September, 667 construction companies filed for bankruptcy, an increase of 16 percent compared to the previous year. There have been 31 bankruptcies in Tyrol this year - a similar number to 2022. The main reasons for the current situation are the rise in interest rates, increased construction costs and the so-called “KIM regulation”. The guidelines for granting loans for residential real estate are leading to a massive decline in residential construction.

The situation in the construction industry could also be viewed as an opportunity, especially for renovations to old buildings and the goals of the energy transition. However, industry representatives are calling for political measures, in particular more investments by the state and federal government, to support the construction industry. Significantly more investment is required, particularly in residential construction, in order to create living space, achieve climate goals and strengthen the construction industry. Despite the challenges, the current tense phase also offers reasons for optimism.

In view of these developments, there could be a further decline in orders in building construction and residential construction. However, companies that specialize in renovation areas and energy modernization could benefit from increased demand. There is a need for the government to review lending rules and take additional support measures to support the construction industry and prevent bankruptcies.