Construction: order stocks below previous-year level

According to the results of the Ifo Business Survey, the business climate for the construction sector improved slightly in August. The contractors were somewhat more satisfied with their current business situation than in the previous month. In addition, they are somewhat more confident regarding the business outlook. The equipment utilisation rate was 73.1% (seasonally and weather adjusted), half a percentage point higher than the value for July, but a year ago the equipment capacities were utilised at nearly 74%. More than one in four survey participants reported constraints in construction activity, with a lack of orders (16%) leading the list. About 5% of the contractors complained of labour shortages. On average for the construction sectors, order reserves declined slightly to 2.7 months (seasonally and weather adjusted), falling short of the previous year level by 0.3 months. The survey responses indicate that contractors succeeded in raising prices slightly more often than in the last survey. Moreover, the scope for price increases in the coming months is likely to enlarge. Only a small portion of survey participants expect an increase in the number of employees.