In 2024, the first layoffs will occur after more than 15 years. 10 thousand people will lose their jobs.

Due to the housing construction crisis, the German construction industry expects in 2024 the first layoffs in the sector since the 2008 financial crisis. “We expect that around 10,000 workers will have to be laid off in the coming months,” said Tim-Oliver Müller, chief director of the construction industry association HDB, to the German news agency dpa.

The reason is the weak economic situation in the construction sector. While commercial and public construction recorded only a slight decline in turnover in 2023, turnover in residential construction fell by 12 percent, Müller said: “We assume that turnover in residential construction will fall by an additional 12 percent in 2024.”

This affects the industry. According to a survey of HDB members, 55 percent of the 450 surveyed companies expect their profit to decrease in 2024. 60 percent of companies wanted to keep their workforce stable, 12 percent wanted to expand it, and almost a third (29 percent) wanted to eliminate jobs.

There will be a shortage of skilled labor

According to HDB, 927,000 people were employed in the construction industry in 2023. The reduction of around 10,000 jobs accounts for only about one percent of jobs in that sector.

The forecasts are nevertheless worrying, because around 120,000 skilled workers are expected to be lacking in construction by 2030, solely due to demographic changes, said HDB chief director Müller. “Whatever happens, we must hire in order to maintain the level of qualified workers – despite the crisis.” Construction is needed more urgently than ever. “Especially when the residential construction engine starts up again, we will miss every single qualified worker that we are now in danger of losing.”

Given increased interest rates and the rising cost of construction materials, residential construction in Germany is standing still: the Ifo Institute expects that only 225,000 apartments will be built in 2024, compared with an estimated 270,000 last year. DZ Bank also sees a downward trend: by 2025, the number of completed apartments annually could fall to 200,000 apartments. That would be half as many as the ruling coalition had planned. At the same time, there is a serious shortage of housing space, especially in cities, which has also affected the increase in rents.

Source: dw.com