Construction: Current Business Situation Clouds Over in Structural and Civil Engineering

After three consecutive increases, the business climate indicator for construction fell in July. Ifo Business Survey participants assessed their current business situation more cautiously than in June. The short-term business outlook, by contrast, brightened slightly. Machinery capacity utilisation rose by half a percentage point compared to last month to 72.5% (July 2014: 71.6%). 27% of the contractors surveyed reported constraints on construction activity, mainly due to a lack of orders (18%). In addition, 5% of companies complained of staff shortages. The order backlog increased to 2.9 months on average across all construction sectors; compared to a slightly smaller order buffer for the same period last year (2.8 months). According to firm reports, price increases were implemented slightly more frequently than recently. Moreover, survey participants see greater scope for price increases in the near future. More contractors also plan to increase their staff numbers over the next three to four months.