Sentiment in Germany for residential construction sector rose considerably in September, according to a business climate index published by the Munich-based ifo economic research institute on Monday.

Ifo put the index for the construction sector in Germany at minus 21.8, up 4.6 on the month and at its highest point since August 2022, despite its low level.

Construction companies assessed both their current situation and their outlook as less negative than in August.

“Residential construction is easing a bit,” ifo analyst Klaus Wohlrabe said. “We cannot talk of a real trend change in the construction sector, but the low seems to have been passed,” he added.

With the exception of a brief decline during the pandemic, the index was constantly in positive territory over the years 2016 to 2021, before falling at the start of the war in Ukraine in February 2022.

Over the past 18 months, the index has slowly recovered after being 30 lower at the start of 2024.

The proportion of companies pointing to a shortage of orders rose to 46.7% from 45.7%. Cancellations also remained at a high level.

“The rise in the number of construction permits issued is not showing up yet in order books,” Wohlrabe said.

Railway Reforms In Germany

The new head of Deutsche Bahn (DB), Evelyn Palla, plans to completely restructure the company and significantly improve the quality of the state-run rail operator.

“We are turning the company upside down: I am aiming for a complete fresh start,” Evelyn Palla told the Sunday newspaper Bild am Sonntag.

“For this, we need to do everything differently than before.”

“I am reviewing every job for its added value to our customers. The administration must serve the railway workers,” she said.

Many decisions, according to Palla, will no longer be made at headquarters – the Bahn Tower in Berlin.

“I am making the people on the ground the decision-makers,” she said. “They are the backbone of our company. They, too, deserve a fresh start.”

Palla also announced changes at the executive level.

“My goal is less bureaucracy at Deutsche Bahn and significantly more room for doers,” she said. “Decisions will in future be made where the responsibility lies, not three floors higher.”