Construction (Germany):
Outlook somewhat less positive

In construction, the unfavourable business situation continued, with the upward development in civil engineering being cancelled out by the renewed weakening in building construction. Order reserves worsened somewhat. With more lively construction activity, on average, the equipment utilisation rate climbed to 64% but was still a percentage point lower that the same time of the previous year. The range of order backlogs (2.3 production months) remained unchanged; here too the corresponding previous-year value was not met (2.6 months). Confidence in the business outlook weakened further both for structural and for civil engineering. In the opinion of the contractors, more scope for price increases should open up in the coming months. On balance, 8% of the survey participants expect a decrease of staff levels. Eastern German contractors reported a slight improvement of their business situation but are still not completely satisfied. About half of the surveyed firms reported production constraints due to lack of orders. Although the equipment utilisation rate was better than in February, at 62% the rate was clearly below that of the previous year. The range of order backlogs (1.8 months) was a half a month lower than in the comparable previous-year month. According to the survey responses, the employment situation should deteriorate somewhat in the coming months.