Construction: Less Scope for Price Increases

According to the results of the Ifo Business Survey, the business climate in construction clouded over again in September. Survey participants assessed their current business situation as less favourable than last month. Confidence in the six-month business outlook also fell. The machinery capacity utilisation rate of 73.8 percent (seasonally and weather-adjusted) was around the same level as for the same period a year previously; this represents a 0.7 percentage point increase compared to last month. The order backlog increased by 0.2 months on average across all construction sectors to 2.9 months (seasonally and weather-adjusted), and was thus only marginally lower than the previous year’s value. 27% of survey participants complained of constraints on construction activity. Overall, 14% of contractors faced a lack of orders, while 7% reported staff shortfalls. According to firm reports, pressure on prices increased. Firms also see less scope for price increases in the months ahead. Contractors nevertheless plan to step up their recruitment plans in the near future.