Sector sales fell by 10
Companies in the German precast concrete industry generated a turnover of over 8 billion euros in 2023. This corresponds to a decline of 10 percent. In view of the economic situation, the industry is expecting a further decline in sales of 10% for the current year. This was announced at the press conference of the 68th BetonTage on May 14, 2024 in Ulm.
Housing slump
High construction costs, rising interest rates on loans and an unsteady subsidy landscape unsettled many people looking to build last year, while others were simply no longer able to afford to build. In particular, manufacturers of concrete components such as stairs, ceilings and walls had to contend with the consequences of the decline in building permits and the unfavorable conditions in residential construction. The production of large-format ceiling panels, for example, fell by 30 percent and sales dropped by 27 percent. Large-format wall panels also recorded a decline in production. It amounted to minus 9 percent, while sales fell by 16 percent. Manufacturers of bricks and blocks also had to cope with a 21% decline in volumes.
There were also declines in the manufacture of concrete products for road construction, gardening and landscaping. The production of concrete paving blocks fell by -35 percent, while sales declined by 9 percent. In the case of concrete paving slabs, the decline in volume was 18 percent and in turnover 16 percent.
Demand in commercial construction also declined. This was felt by manufacturers of structural prefabricated parts, who produce components such as beams, columns and trusses for commercial and industrial construction. They suffered a 10 percent drop in sales and volumes fell by 17 percent.
Manufacturers of drainage components such as concrete pipes and manholes felt the effects of the public sector’s reluctance to invest in civil engineering. Their turnover fell by 3 percent and volumes by 13 percent.
Rising producer price indices
The producer price index for building materials, bricks and mortar products rose by 17.6% overall in 2023 compared to the previous year. The index for cement recorded an increase of 32.4%. In the prefabricated concrete products segment, the price indices for large-format ceiling panels rose by 3.8 percent last year, and for wall components by 7.4 percent. Prices for structural prefabricated parts recorded growth of 10.7 percent. The index for concrete pipes was +13.7 percent. The producer price indices for concrete paving stones and paving slabs were +11.6% and +9.2% respectively. Rising producer price indices are also expected for 2024.
Bleak prospects for 2024
The industry is also expecting a further decline in sales of around 10% for the current year. Housing construction remains a problem child. The goal of building the urgently needed 400,000 homes per year is receding further into the distance. At the same time, prefabricated concrete components in particular could be used to quickly create high-quality living space. The industry is calling for further investment incentives such as a reduction in land transfer tax and fewer cost-driving regulations that make building more expensive overall.
