The current business situation and expectations for the German wood industry are rated negatively by companies, with expectations for the next six months being worse than assessments of the current situation in four out of six sub-sectors. Recent negative economic reports have led to increased pessimism regarding a rapid economic recovery.
From the HDH's perspective, this situation is primarily due to declining demand for construction, driven by high construction costs, poor financing conditions, and inadequate new construction funding. The number of approved single- and two-family houses fell by 26.5% in the first seven months of 2024 compared to the same period last year, while multi-family house approvals dropped by 23.2%. Leading economic research institutes anticipate further declines in residential construction investments this year and next.
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On a more positive note, the significant drop in inflation in Germany could have beneficial effects in the coming months. In September, inflation fell to its lowest level since February 2021, with consumer prices rising by only 1.6% compared to the same month last year, down from 1.9% in August. This easing of price pressure may give the European Central Bank more room for further interest rate cuts.
A recent report by the European Environment Agency (EEA) provides recommendations for overcoming the current challenges in the construction-related sector, particularly in the area of renovation of existing buildings.
According to this report, published on September 30, 2024, reducing the ecological footprint of buildings in Europe is a key starting point for becoming climate neutral by 2050. To date, more than 30 percent of the ecological footprint in the EU is attributable to the building stock.
There are opportunities and positive aspects in sustainable renovation, for example. The use of environmentally friendly building products can significantly reduce the environmental impact. Increasing the energy efficiency of buildings can reduce energy consumption and also make a positive contribution.
The report suggests that a unified policy strategy that takes into account the entire life cycle of buildings can create synergies and avoid trade-offs. The report also highlights that sustainable building systems should provide affordable and accessible housing for all. This goal could be supported, the authors argue, by participatory approaches to decision-making that promote strong local communities, as well as by funding for building renovations and upgrades to make sustainable buildings more affordable now and in the future.
Despite the current negative business situation in the wood industry, sustainable renovations of existing buildings and support through political measures offer significant opportunities. These approaches can not only reduce environmental impacts, but also open up new business opportunities and stabilize the industry in the long term.
More information:
HDH
www.holzindustrie.de