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Construction industry is hampered by slow approval processes

The construction industry is fighting its way through the Corona crisis, and without having to take significant losses. The order situation is so good that sales remained stable even in the crisis year 2020. In the coming year, however, slow approval processes could slow down the construction industry.

Approval process still not digitized

The corona crisis has made waves through most of the German economic sectors. As one of the few industries, however, the construction industry established itself as crisis-proof. Thanks to a large number of existing orders, the construction industry flourished despite the pandemic, but as Reinhard Quast, President of the Central Association of the German Construction Industry (ZDB), has made known in a public statement, a decline in sales should be expected in 2021.

Approval procedures that run slowly get in the way of new projects, so that after the current construction work has been completed, possible follow-up work cannot be tackled early. While the industry, according to the President of the Federal Association of Independent Real Estate and Housing Companies (BFW), Andreas Ibel, has hardly had to contend with delivery bottlenecks despite the crisis, “everything that has to do with building permits is […] a big problem ”, as he explains in an interview with the Handelsblatt.

Ibel regrets that the corona crisis has been going on for many months and that the approval of construction projects does not work digitally. “The digital equipment of the administrations was delayed for years – that is now paying off,” added the President of the BFW.

Administrative offices do not work with the available technical means

In times of the Corona crisis, the construction industry symbolizes the backbone of the German economy, which cannot start numerous projects in time due to the slow approval process. According to Ibel, this will result in economic setbacks that can be avoided.

Thomas Speeth from the Schiffszimmer cooperative said in an interview with the Handelsblatt, “Corona must be a wake-up call to finally push ahead with digitization. […] The employees in the building authorities must be put in a position to be able to advance the approval process also in the home office, so that the bottleneck approval does not narrow even further. “

The administrative offices must therefore be restructured so that the long processing times are shortened and the bureaucratic effort does not act as a brake on the construction industry in Germany. “The digital era should dawn”, also commented the managing director of Wertgrund, Timo Holland, to the Handelsblatt.

Commercial construction must be promoted

With regard to the short-term negative consequences that the Corona crisis could have on the construction industry, Quast regards residential construction without major worries. “Incoming orders only showed a‘ Corona tremor ’in April and May and gave way slightly. […] Overall, the outlook for 2021 remains upwards. This is supported by the sustained high demand and an already high excess of permits, ”says Quast.

The ZDB expects that another 300,000 apartments will be built in the coming year, which means that sales will remain roughly at the current level.

The developments in commercial construction should be viewed much more critically; according to Quast, the crisis is clearly felt here. Compared to the previous year, demand has fallen by around 6 percent, which corresponds to “an order volume of a good 1.3 billion euros”. Accordingly, the ZDB expects a drop in sales of 2.5 to 3.5 percent in 2021.

The public sector is now obliged to actively promote the construction projects in order to strengthen this branch of the construction industry.

Image sources: yuttana Contributor Studio / Shutterstock.com

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