Construction: Business Climate Changes Very Little

According to the results of the Ifo Business Survey, the business climate in construction deteriorated only negligibly in October. The contractors surveyed were somewhat less satisfied with their current business situation than last month. By contrast they assessed their six-month business outlook slightly more favourably than recently. Machinery capacity utilization remained at 73.7% (seasonally and weather-adjusted) in October and was thus 1.5 percentage points above last year’s level. Around one quarter of survey participants reported constraints on construction activity. 11% of contractors complained of a lack of orders, while 9% reported labour shortages. The order backlog fell slightly. The average order backlog across all segments dropped from 3.0 months to 2.9 months (seasonally and weather-adjusted), but was still higher than a year ago when the figure was only 2.6 months. The test results reveal that price hikes were implemented less frequently. Contractors also believe that there will be less scope for price increases in the months ahead. Planned staff increases in the short-term future were less widely reported than in recent months.