Progress on many construction sites in Germany is sluggish these days. There is a lack of wood, steel, insulation material – and in the near future there may even be a lack of screws.
The growing shortage of building materials has worsened over the past month. According to a survey by the Ifo Institute, 43.9 percent of the companies in building construction reported that they had problems procuring building materials on time. That was twice as many as in April, when only 23.9 of the companies complained of such problems. Civil engineering was slightly less affected, with 33.5 percent in May. In April only 11.5 percent of the companies reported bottlenecks there. “Capacity utilization in the industry is still high,” said Ifo expert Felix Leiss. But more and more companies are worried about the delivery bottlenecks. ” In addition, there are rapidly rising raw material prices. “The prices for sawn timber have almost exploded in the last few months, the sawmills cannot keep up,” said Leiss. Steel has also become considerably more expensive. Insulation materials and various plastics are also in short supply.
Warning of “unprecedented chaos”
Screw manufacturers also fear bottlenecks. The high capacity utilization, raw material bottlenecks and logistics problems have already plunged the international supply chains into “unprecedented chaos”, said Volker Lederer, chairman of the Association of Screws Wholesale (FDS) to the “Handelsblatt”. If the European Union now also levied additional tariffs on the import of iron and steel fasteners from China, it would “conjure up the perfect storm,” warned Lederer. The EU Commission is currently examining whether to impose anti-dumping duties on suppliers from the People’s Republic. The authorities want to announce by June 22nd whether they will impose temporary punitive tariffs. Lederer warns against making it more difficult for Chinese producers to deliver to Europe: “In order to avoid production line failures in Europe, the domestic economy needs the capacities of the entire Asian procurement market – including China.”
The order situation is still stable
The construction industry is following developments critically, but has not yet suffered any losses in orders. “We have a stable order situation,” said Stephan Rabe from the Main Association of the German Construction Industry (HDB) to the Reuters news agency. In March, the companies reported a record order backlog of 62 billion euros. “The pipeline is full, the companies are working very well.” So far, the association expects sales to stagnate this year. “If the impairments persist beyond the middle of the year, the shortage of materials increases, entire construction sites have to be closed and the prices asked continue to rise, then this will have a negative impact,” said Rabe. Then the sales forecast could not be kept. The problems caused by supply bottlenecks have also widened in German industry as a whole. “Almost four out of five manufacturers now report longer lead times for their raw materials,” said IHS Markit economist Phil Smith, which surveys hundreds of managers every month. A growing number of companies complained about negative consequences for production and new business as a result of the forced downtimes.
You must log in to post a comment.