Construction (Germany):
Clouding of business climate

In construction, the business situation remained at the state of the previous month. Within structural engineering it deteriorated both for public-sector and for commercial buildings, whereas in residential construction the situation was again assessed somewhat less negatively. Equipment utilisation in all construction sectors was 68%, a similar level as in the previous two months but not quite matching that of 12 months ago. Also in the range of order backlogs (2.4 months) nothing changed; at the same time last year order reserves stood at 2.7 months. Correspondingly, again 30% of the survey participants complained about hindrances to construction activity due to a lack of orders. Confidence in the business outlook, both in structural and in civil engineering, weakened somewhat. According to the responses of the firms, leeway for raising construction prices will tend to narrow in the coming months. Staff reduction are again planned by only 11% of the survey participants, on balance. The clouding of the business climate in eastern German construction was the result of poorer assessments of the current situation. At 73% equipment utilisation was the same as the previous month but again lower than at the same time of the previous year (75%). The range of order reserves was 1.9 months (previous year: 2.3 months). The surveyed firms see the future with unchanged confidence, and they also expect further improvement of the employment situation.