Due to the war in Ukraine, the Federation of the German Construction Industry can no longer rule out construction stops for many projects. According to the association, it is uncertain whether there will be enough material for all construction sites in Germany. In addition to steel producers, who would have to reduce their production, large refineries have also announced that they will have to reduce their bitumen production. Bitumen is used in road construction and for the production of roofing membranes, among other things.
According to the Federation of the German Construction Industry, even screws and nails are no longer arriving in Germany due to sanctions. "We should ask ourselves [...] which projects we have to stop and which we can't do without," says Tim-Oliver Müller, Managing Director of the German Construction Industry. The major price increases, such as for steel, bitumen and aluminum, mean that material suppliers can no longer submit binding offers.
However, as companies cannot pass on price increases in current contracts to their customers, this leads to an economic risk and means that they are left with the additional costs. The Federation of the German Construction Industry is therefore calling for a price escalation clause for contracts. However, this would mean that clients would have to bear the additional costs. If nothing changes in the current situation, short-term construction stoppages cannot be ruled out, according to the association.
Source: bauindustrie.de
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