Fewer new homes will be built in the coming years. There is still no relief in sight when it comes to construction costs.
The construction industry will slow down this year after a record year, the economists at Bank Austria expect. At the beginning of the year, a high order backlog from 2021 ensures high capacity utilization. However, construction production has already cooled down in the autumn due to the shortage of materials and jobs. The bank economists see clear signs that the housing boom of the past few years is abating.
No relaxation in construction costs
In the previous year, sales in the industry are likely to have increased by around 14 percent to more than 61 billion euros. “The year 2021 could have been even better for the construction industry if a shortage of materials and, towards the end of the year, a shortage of workers had not slowed down construction production,” says Bank Austria economist Günter Wolf. Bank Austria does not yet see any signs of easing in terms of construction costs: A significant slowdown in the increase in construction costs can probably only be expected from the second quarter of 2022, when the supply of starting materials has improved and demand for construction has cooled down more. A drop in costs is not to be expected.
Construction activity is slowing down
The construction industry will slow down this year in structural and civil engineering. Because in the coming years it is likely that significantly fewer new apartments will be built than in previous years. However, the demand for new apartments is also falling. In addition, the high property price increases would lose their function as a driving force for new residential construction, because the positive effects of value increases are overshadowed by falling rental yields. According to economists, a central growth driver in the construction industry will be the renovation of buildings. The climate protection measures in buildings were essentially aimed at the thermal-energetic renovation of the housing stock.