Vierteljahrshefte zur Wirtschaftsforschung 4 / 1975, S. 268-281
Horst Droege
The aim of the present study is to gain perspectives on building demand in West Berlin and to design a model to depict development of the city's capacity in the various branches of construction. This is to assist the Berlin Senate in making its medium range budgetary decisions reflect both economic and social policy goals and realistic capacity projections. Also, the building trade is to be provided with bases for assessing future demand in the various branches. The starting point is a forecast of demand in each of the construction sectors in the period 1975 through 1979. On the basis of these figures, the requirements on the various branches of the building trade, as well as on certain other sectors of the economy, are calculated. Estimates are then made - in accordance with a capacity model for the base year 1974 - of production potential in the construction industry based on assumptions on the development of employment and labor productivity. Demand and capacity parameters are compared; overhangs in either demand or capacity, overall and in certain of the comprising markets, are calculated on the basis of rough figures on capacity utilization. Our calculations pointed up the following: Already in the year 1975, there will be less than full utilization of capacity in both rough construction and finishing. In the years 1976 through 1979, rough construction - and particularly the "pure" construction firms - will continue to experience noticeable declines in the degree of capacity utilization. A breakdown of figures reveals that the decrease in average capacity utilization is attributable primarily to building construction as opposed to which, civil engineering firms will remain comparatively busy. Utilization of capacity in finishing will decline only slightly over the course of the projection period. The margin for cutbacks in production capacity is thus generally limited in this sector.