Timber bottlenecks lead to construction stoppages in Germany

[May 28, 2021]  By Reinhard Becker

BERLIN (Reuters) - Supply bottlenecks with timber, steel and insulating material are causing construction stoppages in Germany and threatening to slow the country's recovery from the coronavirus slump, building associations said on Friday.

A general view of a construction site for a residential building, in Berlin, Germany, April 15, 2021. REUTERS/Michele Tantussi

The German economy, Europe's largest, shrank more than expected in the first quarter due to COVID-19 restrictions, but upbeat business sentiment surveys are now heralding a swift summer recovery.

The strength of the rebound depends on how much consumers will splash out once curbs are lifted and how much manufacturers will be able to overcome supply bottlenecks.

Roofers, who rely heavily on timber, are among building companies that are particularly hard hit by the shortages.

In some regions, roofers are facing a tripling of prices and some even complain that they can't obtain timber at all, Dirk Bollwerk, head of the German Roofers Association, told Reuters.

"The wood crisis caught us off guard," Bollwerk said.

The delivery problems are partly linked to the strong economic rebound in many countries, which has pushed up global demand for timber, steel and other building materials.

"With the economic recovery in the United States and China, the international supply chains were turned upside down," the German Construction Association (ZDB) said in a statement.

Pest infestation of forests in Europe and Canada as well as export restrictions by some countries have also reduced timber supply and pushed up prices.

The prices for roof battens, a standard building material, have exploded since February, said Bollwerk, who heads a medium-sized firm of roofers in the western state of North Rhine-Westphalia.

Bollwerk added that a growing number of firms were seeing themselves forced to stop construction due to missing material.

The problem is affecting other building companies as well.

"The bottlenecks have the potential to bring the construction sites to a standstill in the summer," ZDB Managing Director Felix Pakleppa said.

German exports of timber jumped last year and building company associations earlier this month called on the government to impose trade restrictions to keep more wood for domestic clients.

Economy Minister Peter Altmaier has rejected such a step, saying export restrictions are not compatible with the government's stance of supporting open markets and free trade.

Altmaier has instead promised construction companies that the government will cut red tape and also temporarily relax strict rules for contractual penalties in case of construction delays.

(Reporting by Reinhard Becker; Writing by Michael Nienaber; Editing by Frances Kerry)

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