Construction: Business Climate Indicator in Structural Construction and Civil Engineering Hits All-Time High

The business climate in construction improved for the sixth month in succession in September, according to the results of the Ifo Business Survey. Survey participants have not assessed their current business situation this positively since the beginning of data collection after German unification at the beginning of 1991. In addition, confidence with regard to the six-month business outlook rose to its third highest ever level. Machinery capacity utilisation rates were slightly lower than last month at 74.6%; but higher than the figure of 73.3% for the same period a year previously. The order backlog remained at an average of 3.4 months across all construction segments and was thus half a month below the level reached during the same period in the previous year. A quarter of survey participants complained of restraints on construction activity. Overall, 11% of contractors struggled with a lack of qualified staff and 10% with a lack of orders. Other background reasons played virtually no role. According to reports by contractors, price increases were implemented more frequently. Far more contractors expect to implement price hikes in the months ahead. A higher number of construction companies are also planning to expand their staff bases in the months ahead, with employment expectations hitting a high only only previously exceeded once in December 2015.