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Ifo: Business Sentiment in German Residential Construction 'Massively' Weakens in April on Macro Headwinds

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The business climate in German residential construction "massively" deteriorated in April, as the industry faces supply chain challenges and rising financing costs amid geopolitical uncertainty.

The ifo Institute reported on Friday that the business climate index tumbled to -28.4 points from -19.3 points a month ago, marking its sharpest fall since April 2022. Companies' current situation perspective was seen as "worse," while their future expectations were "much more pessimistic."

Concerns about potential supply constraints are resurfacing, with material shortages affecting 9.2% of surveyed firms, compared with the 1% figure seen over two years. Reports of order shortages and cancellation rates held steady at 43.8% and 10.8%, respectively.

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