Construction: Business Expectations Approach Record Highs

The business climate in construction improved for the third month in succession, according to the results of the Ifo Business Survey. Although the contractors surveyed were slightly less satisfied with their current business situation than last month, they assessed their six-month business outlook more favourably. The survey results for business expectations almost reached the German record high of February 2007. Machinery capacity utilization edged upwards to 73.2%, taking it up to the level of the same period last year. 26% of survey participants reported constraints on construction activity. 13% of contractors complained of a lack of orders and 7% of staff shortages. The average order backlog across the various construction segments rose from 2.9 months to 3.0 months and thus exceeded the previous year’s value. The test results show that price increases were implemented more frequently. Firms also expect scope for price increases to grow in the months ahead. The companies surveyed plan to markedly expand their staff base in the near future. The survey figures on developments in employment were at a remarkably high level for the third month in succession.