Construction: Scope Grows for Further Price Hikes

The business climate in construction continued to improve in September, according to the results of the Ifo Business Survey. Survey participants assessed their current business situation as more favourable than last month. Moreover, confidence in the six-month business outlook continued to grow. Machinery capacity utilisation of 73.2% was somewhat higher than the same month last year. The order backlog remained at 2.9 months on average and was thus above the same level of last year. 24% of survey participants complained of constraints on construction activity. Overall 13% of construction firms were confronted with a lack of orders; while 7% reported a lack of manpower. Other background reasons were negligible. According to firm reports, pressure on prices has recently continued to drop. Contractors also expect scope for price increases to grow in the months ahead and plan to grow their staff bases in the near future.