Almost a whole year has passed since the outbreak of Russia’s war of aggression against Ukraine, which violated international law. A year that many had associated with the hope of normality after the long and exhausting Corona pandemic. And also a year that, with its ambitious housing construction target, nurtured the expectation that the urgently needed new housing construction would finally be pushed forward politically.
In many respects, disillusionment has set in in the construction industry, including the brick and tile industry. A look at the current economic development makes the challenge clear: Brickmakers were able to achieve a 5.5 percent increase in turnover in the first three quarters of last year compared to the same period of the previous year. However, demand for construction and building materials continued to weaken, especially in the third quarter, held back by ongoing supply chain problems and very high energy and material prices. The optimistic sales forecasts from the beginning of the year now have to be corrected downwards. Uncertainty is spreading and causing the number of building permits to slump, especially for detached and semi-detached houses. Construction demand in all building sectors is expected to remain subdued in the new year 2023.
The capping of energy prices by the gas and electricity price brake can be seen as a positive contribution to the companies’ planning security. Even if the criteria are too restrictive and limit the effectiveness of the measure, the political will to ensure stable and economic energy prices as a basic prerequisite for industrial value creation in Germany is recognisable. The federal government must act quickly and set the course for the coming years.
In addition to energy policy issues, this year we will focus on positioning the sustainable natural product brick. This concerns both the life cycle assessment and the adequate and low-threshold design of new and technology-neutral funding programmes. Since April 2022, the EH-40 subsidy has only been available in combination with the Quality Seal for Sustainable Construction (QNG). This absolute binding is too ambitious. The planned funding volume of only one billion euros also does not meet the challenge. New construction funding must be fundamentally redesigned to counter the downward trend in the construction sector.
As you can see, we have a lot ahead of us. We are confident that politics and business will master the challenges together and are happy to contribute to making it happen.
I wish you an enjoyable read and a successful brick year 2023!
Chief Executive Officer of the Federal Association of the German Brick and Tile Industry e. V.