Construction: Slightly improved business climate

The business climate in construction was a little more favourable in July than in the previous month. The contractors participating in the Ifo Business Survey were less dissatisfied with the current business situation; with regard to business developments in the next six months, their reserve has also decreased somewhat. Almost 40% of the survey participants reported hindrances in building activity, the largest factor being insufficient orders. The equipment utilization rate rose one percentage point to 69% (seasonally and weather adjusted), thus matching the previous year value. The depth of order stocks increased insignificantly to 2.4 months (seasonally and weather adjusted) on average for all construction sectors; a year ago the order cushion was somewhat larger (2.5 months). The survey responses indicate that prices remained under pressure in July. In the opinion of the survey participants, they will have to lower prices only moderately in the coming months, however. Personnel reductions in the coming months are only planned to a small extent.