Increased costs squeeze margins, as many construction companies have to shoulder them in large part themselves.
“The price increase for building materials continues. The price of timber in particular continued to rise, increasing by 8.4 % in September 2021 within a month. It is now 137 % above the level of the previous year,” commented Tim-Oliver Müller, Chief Executive of the German Construction Industry Association, on the producer price indices for commercial products in Germany published today by the Federal Statistical Office. “In this case, the base effect due to the temporary VAT reduction in the 2nd half of 2020 does not even play a role. The producer price indices are shown without VAT.” The price for reinforcement steel in bars would also have been 82 % above the previous year’s level in September 2021, so the slight decline of 1.9 % compared to the previous month would hardly have mattered. On the other hand, the prices for wire rod and for open profiles had risen further within a month, by 8.7 % and 7.0 % respectively. They were thus 39 % and even 102 % above the previous year’s level.