Construction (Germany):
Declining order stocks

Construction firms evaluated their current business situation as only slightly worse than in the previous month. In structural engineering it improved in all three sectors, but in residential construction it is considerably worse than in commercial construction. Average equipment utilisation remained virtually unchanged; at 68% the comparable previous-year level (69 %) was nearly matched. Order backlogs have declined (to 2.4 production months); in May 2006 contractors still had order reserves of 2.6 months. With unchanged confidence, firms appraised the outlook for the coming half year, whereby confidence increased for structural engineering and declined for civil engineering. According to the responses, prices are likely to increase; the number of employees will also rise. In eastern Germany an improved business situation stood in contrast to a slightly weakened confidence in the expectations. Equipment utilisation increased to 73% but did not quite match the previous-year level. Order reserves fell to 1.9 months because of the weakening in structural engineering. For the next months contractors expect price increases to be stronger.