Construction: renewed worsening of business climate

According to the results of the Ifo Business survey, the business climate in con-struction worsened again in May. The surveyed firms were more dissatisfied with their current business situation. They were also more critical of further business developments than in April. Equipment utilisation was also worse than in April; at 68% (seasonally and weather adjusted), however, the equipment utilisation rate was the same as 12 months ago. Approximately 40% of the sur-vey participants reported production constraints, the largest part of which by far (35%) - as also in May 2008 - was a lack of orders. The range of order stocks also shrank, on average for the construction segments; at 2.4 production months (seasonally and weather adjusted) the previous year's value was ex-actly matched. The survey responses indicate that the pressure on prices is continuing. For the coming months the firms anticipate stable prices, however. Staff levels should contract further.