Construction: Higher Equipment Utilisation Rate

According to the results of the latest Ifo Business Survey, the business climate in the construction industry improved again in August. The contractors were more satisfied with their current business situation than in the previous month. In addition, they view the future with more confidence. The equipment utilisation rate climbed from 72.9 to 75.1%, which was an increase of more than 3 percentage points over the previous year. The construction constraints were similar to those of the previous two months: 27% reported constraints in construction activity mainly due to a lack of orders (15%); about 8% complained of labour bottlenecks. On average for all construction sectors, order reserves increased again, reaching 3.0 production months; a higher order backlog was last seen at the end of 2013. The surveyed contractors reported that they were able to raise their prices a little more often, and they expect more scope for price increases in the coming months. The contractors also anticipate an increase in the number of employees, a survey variable that has steadily improved over the past three months.