Construction: Backlog Falls

The business climate for construction continued to deteriorate – but remains very favourable. The companies participating in the Ifo Business Survey were less satisfied with their current business situation. However, contractors expressed slightly greater confidence in the short-term future than in December. Machinery capacity utilisation rose from 74.3 to 74.5%, making it almost one percentage point higher than the previous year’s level. Two out of five test participants reported constraints on construction activities (January 2014: 36%). 22% of contractors complained of a lack of orders, while 19% cited weather-related constraints. Order backlogs fell on average across all construction sectors by 0.1 months to 2.7 months, versus 2.9 months for the same period one year ago. According to company reports, price increases were implemented more frequently than last month. Survey participants see a similar scope for price increases in the short-term. Contractors expect staff numbers in the near future to increase at a slower pace than expected in December.