The business climate in the building technology sector recorded a further decline in the third quarter of 2024 and, at -16 points, is in negative territory. Compared to the two previous quarters, the economic outlook has deteriorated slightly, although the value remains above the ifo index published for the German industry in general.

Expectations for the next quarter and the assessment of the current business situation have declined again. By way of comparison, in the third quarter of 2022, the business climate was still +42 points above the current level.

The causes of the continued decline in the business climate are manifold. Particularly in the new construction sector, there has been a noticeable drop in completions. In addition, high inflation and the associated uncertainty among many homeowners are leading to the postponement of projects in existing buildings.

Business climate by product area

After a brief recovery, the bathroom supply and ventilation/air-conditioning sectors are showing a renewed decline. Both areas (bathroom: -21; ventilation/air-conditioning: -34) show a clearly negative business climate, while the heating sector is doing somewhat better at -13 points.

Business climate by economic sector

Manufacturers and traders assess the economic situation as significantly worse than the craftsmen. While the business climate reported by the craftsmen is still positive at +15 points, the manufacturers present a pessimistic picture: at -25 points, the business climate is once again negative. At -37 points, the traders assess the situation worse than industry and craftsmen.

Outlook for the coming quarter

The market research company B+L, which collects economic data on the bathroom and heating industry on behalf of the VdZ and VDS, expects a more dynamic development of economic performance for the year 2025. This could lead to an improvement in the market environment both domestically and in important export markets, which should have positive effects on domestic and building technology.

Current surveys also show that the propensity to consume in the area of private renovations is increasing in the course of 2024. Deferred renovation projects are expected to be made up for in the second half of 2024.

 

Jens J. Wischmann, Managing Director of VdZ and VDS, says: ‘The current situation and expectations for the coming quarter remain gloomy in the industry. At least we are currently seeing a slight recovery in the heating product segment. In the plumbing sector, expectations are muted, but increased interest in plumbing exhibitions points to a possible improvement in sales figures in 2025.’

 

Please find the press release at VdZ-Website (German language only)

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