The global spread of COVID-19 is troubling for us all. It affects our private lives—we worry about family, friends and relatives. Good health is a most precious gift. Our thoughts are with all those who are suffering at this very difficult time.
The COVID-19 pandemic is also a huge concern in our working lives. What will it mean for the future of the building sector? What will it mean for job security?
So of course BAU will be looking at the implications: What next for building after Corona? The supporting program will present analyses and case studies as well as possible solutions. At BAU we see ourselves as your partner. In good times and in bad.
Against this background, we would like to express our warm thanks for the trust many of our exhibitors and partners are placing in us at this time. We appreciate your continued support in the interests of a successful BAU and a positive year of business in 2021. Together we can succeed.
Your BAU Exhibition Team
The coronavirus pandemic has overrun our totally defenseless society and economy in recent months. At the moment, we can only speculate about the long-term impact that this illness will have on individual industries. We are unlikely to have any meaningful forecasts about the impact for several months or, possibly, several years. But we are already feeling the short-term economic pain caused by the virus. Lockdowns and temporary unemployment have bruised both national and international economies. Just like leaders of other industries, executives in the construction business are now trying to determine where their sector will head after the coronavirus crisis.
Following the massive collapse in April, the sentiment throughout the German economy and the construction industry noticeably improved in the following two months. The ifo Business Climate Index rose to 86.2 in June, after already reaching 79.7 in May. This is the strongest ever recorded increase. Due to the coronavirus pandemic, the index plunged to 74 points, representing the lowest level up until that point. Businesses’ assessment of the current situation improved somewhat and their expectations also took a substantial leap forward.
The situation is virtually the same in main construction trades. There the index is slowly recovering, after it plummeted to a historic low of -17.5 points. May saw a slight improvement to -12.3 points and it even managed to reach -7.5 in June.
The most recent business survey conducted by the Central Association of German Construction Companies (ZDB, Zentralverband Deutsches Baugewerbe), revealed that the overall mood within the construction industry remains cautious against the backdrop of the coronavirus pandemic. According to this, the development in demand and production that is typically characteristic for the upturn in construction activity during early summer has not precipitated, instead remaining largely at the previous month’s level. The construction companies surveyed have reported a downward trend particularly with regard to the commercial and public sectors. Only the order backlog in residential construction is still described as “sufficient.”
“Just as in the month before, we are still noticing the impact of the coronavirus pandemic. Companies are also faced with the additional aspect of protecting the health of employees by adhering to social distancing and hygiene regulations. Plus, there are disruptions in the supply chain,” says Felix Pakleppa, head of the ZDB association, explaining the results of the survey. “We are carefully watching the economic development. If the current trend gains traction, then the construction industry will close out the year in considerably worse shape than in 2019.”
Dieter Babiel, the head of the Main Association of the German Construction Industry (Hauptverband der Deutschen Bauindustrie), agreed: “Construction companies did indeed begin the year with a tremendous number of contracts. But we fear that they will evaporate as the year wears on. It is easy to see why, too: Every fourth construction company has reported about canceled contracts and 45 percent about declining demand or a dearth of calls for bids, particularly in the municipal segment.”
The Main Association of the German Construction Industry currently anticipates that revenue from construction industry for main construction trades will stagnate at the prior-year level in 2020. A price-related decline of 3 percent is expected. This image is also confirmed by the current survey conducted with the member companies – with 37 percent of them anticipating a revenue decline of more than 5 percent, 21 percent forecasting a decrease of less than 3 percent and 28 percent seeing no changes with regard to revenue. Only 14 percent of companies surveyed are expecting an increase in revenue.
The negative consequences of the coronavirus pandemic for architecture and engineering offices are still rather limited at this time. This was the result of two Germany-wide surveys conducted by the Federal Chambers of German Architects and Engineers (Bundesarchitekten- und Bundesingenieurkammer). In June, 58 percent of the engineering offices questioned indicated that the negative impact of the coronavirus pandemic could be felt, during the first survey in April, this figure was still at 75 percent.
“Overall, the situation now seems to be less dramatic than a major portion of the planning offices had feared. Even so, this is no time to sit back and relax,” says Hans-Ullrich Kammeyer, President of the Federal Chamber of Engineers, summarizing the results of the survey. He also warns that the crisis could have an even stronger, delayed effect on planning offices. Therefore, he calls upon the Federal Chamber of Engineers to, among other things, support customers from the public and commercial sectors, thus ensuring construction contracts, approvals and payment flows.
What impact will the coronavirus pandemic have on architecture in the future? According to Zhu Xiaofengm (Scenic Architecture Office) who is based in Shanghai, architecture is now facing a completely new challenge: “Our past interest was to develop new rooms for groups. But we have to change our thinking now. Architects have to answer one question: What type of room will have the flexibility needed for group gatherings and partitioning?”
Tan Gangyi, an architect in Wuhan, said the coronavirus pandemic could have a positive effect on architecture and building practices: “Remote monitoring, VR technology, particularly after the introduction of 5G, and other technologies will have a huge impact not only on design, but also on architecture. The production and sharing of knowledge will change, and the combination of online and offline activities in architect training and architectural design will become more and more common.”
BAU, the world’s leading trade fair for architecture, materials and systems, will showcase the ideas and solutions that the construction industry will offer after the crisis from January 11–16, 2021, in Munich.