Construction (Germany):
Clearly dampened outlook

In construction the disappointment with current business increased. The worsening was especially evident in structural engineering, after improvement tendencies were observed here in the last three months. The equipment utilization rate fell about 2 percentage points, but matched the comparable previous year value of 63%. The range of order backlogs (2.5 production months) remains unchanged since mid-2007, but contractors are more dissatisfied with order stocks than they were in January. The expectations deteriorated again, particularly for residential and public-sector construction. Staff levels should decline somewhat. Scope for price increases is seen by only a few survey participants. Construction firms in eastern Germany also assessed their current business situation more unfavourably than in January. More than half complained about production restraints due to order shortages (January: 41%). Equipment utilisation at 61% was lower than in the previous month but a little higher than the same time last year. In the assessments of the business outlook, the pessimists have gained considerably weight, both in structural as well as in civil engineering. The survey participants still feel the moderate price increases are possible.