Construction: Business Climate Improves

The business climate indicator for construction continued to rise in April. According to the results of the Ifo Business Survey, the contractors surveyed were more satisfied with their current business situation than last month. They were also slightly more confident about the six-month business outlook. Machinery capacity utilisation was clearly weaker than in March at 72.1%, and machines were markedly less frequently used than last month (April 2014: 74.5%). Almost half of the contractors surveyed reported production constraints (April 2014: 33%). 27% of survey participants reported constraints due to poor weather (April 2014: 3%). A quarter of the contractors surveyed reported a lack of orders – a similar figure to the same period a year previously. The order back log remained at 2.8 months and was thus slightly below the previous year’s level. According to the survey results, the price of construction services looks set to rise on a more widespread basis than recently. Contractors expect further price increases in the months ahead. As far as staffing is concerned, a slightly higher number of firms expect their staff base to expand in the near future.