As of: February 27, 2024, 5:04 a.m
By: Amy Walker
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The struggling construction industry, which has been waiting for stimulus for months, would particularly benefit from the Growth Opportunities Act.
But the Union refuses to give its consent.
Berlin – Anger is slowly threatening to boil over in the construction industry.
Five months have already passed since the traffic light government promised measures to boost housing construction at a construction summit in the Chancellery.
The central component here is tax relief such as the degressive AfA.
But the measures have still not been decided because the Union is blocking the Growth Opportunities Act in the Federal Council.
10,000 jobs are to be cut in the next few months
Sooner or later this will lead to job cuts in the construction industry – for the first time in 15 years.
“We are currently expecting that around 10,000 jobs will have to be cut in the coming months,” said Tim-Oliver Müller, general manager of the construction industry association HDB, to the dpa news agency a few weeks ago.
Given this, one would think that quick action would be the order of the day.
“Housing construction is in its biggest crisis since the 1990s.
The number of building permits and incoming orders are decreasing.
At the same time, hundreds of thousands of apartments are already missing,” writes the Central Association of the German Construction Industry (ZDB).
But the Growth Opportunities Act and the measures adopted therein for the construction industry continue to be stubbornly blocked - because the Union insists that the abolition of agricultural diesel subsidies be reversed.
Without this compromise, she wants to refuse consent.
“Some people still don’t seem to fully understand the seriousness of the situation.
Without quick investment incentives, housing construction will eventually collapse completely,” the association continued.
Peter Hübner, President of the Main Association of the German Construction Industry, also warned in a statement that people should take the government at its word and expect action.
“The construction industry builds the foundation of our prosperity.”
If the construction industry declines, the country's overall economic output will decline.
“In order for our industry, with around one million employees and a GDP share of over ten percent, to become an economic driver again, politicians must ensure a reliable investment perspective in the coming years,” continued Hübner.
Fear is also spreading in other sectors of the economy
The lack of agreement on the Growth Opportunities Act - which, as things stand now, could come on March 22nd at the earliest - is not just annoying the construction industry.
“The result of the mediation committee on the Growth Opportunities Act is a catastrophic signal for the German economy,” said the President of the BDI industry association, Siegfried Russwurm, on Thursday (February 22).
The hanging period will be extended.
The planned relief volume has now been more than halved to just 3.2 billion euros and remains far behind the companies' original expectations.
The wholesale association BGA described the planned relief volume as too low and it also came too late.
Germany as a business location is being damaged.
“In the crisis, the federal government, the states, the government and the opposition must finally pull together,” demanded BGA President Dirk Jandura.
“Otherwise trust in the future-oriented, economic actions of politicians will continue to decline.
In order to relieve the burden on agriculture, the Union is taking the entire economy hostage.” The President of the German Chamber of Commerce and Industry (DIHK), Peter Adrian, referred to increasing frustration in many companies.
They doubted whether politicians had recognized the seriousness of the situation.
Real estate companies are increasingly slipping into insolvency
Things are slowly becoming dicey for the construction industry: Companies in the industry are increasingly slipping into insolvency because order books remain empty and construction has become “effectively impossible,” as a recent report by Immobilienweise said.
“Anyone who builds today will go bankrupt,” said the President of the Central Real Estate Committee, Andreas Mattner.
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request, building president Thomas Reimann places responsibility
directly at the feet of the CDU leader: “I don’t understand Friedrich Merz.
I note all of this with great regret, I am disappointed!” The compromises agreed in September 2023 were a “good and important signal” that the construction industry urgently needs to pass.
The fact that this doesn't happen is "an absurdity in the current situation, because an agreement on the degressive Afa and rapid implementation would be the order of the day."
Friedrich Merz and the CDU block the Growth Opportunities Act in the Federal Council © Michael Kappeler/dpa
An agreement is still not in sight after the meeting of the mediation committee of the Bundestag and Bundesrat on Wednesday evening.
The committee decided on a compromise proposal by 17 votes to 13 with two abstentions, but the Union did not support it.
The necessary approval in the Federal Council is therefore not evident for the Growth Opportunities Act from Federal Finance Minister Christian Lindner (FDP).
With material from Reuters