Construction: Business Expectations in Construction Prove More Positive Than Ever

The business climate in construction improved for the seventh consecutive month in October, according to the results of the Ifo Business Survey. Although the contractors surveyed were marginally less satisfied with their current business situation than last month, their assessments of the six-month business outlook were more favourable. The survey value for business expectations reached its highest level since collection of survey data for Germany as a unified nation began at the start of 1991. Machinery capacity utilisation rose marginally to 74.9% and was thus 1.6 percentage points above the level of the same period of the previous year. A quarter of survey participants reported constraints on construction activity. 11% of contractors complained of a lack of orders and/or qualified staff (October 2015: 13% and/or 7%). The average order backlog remained constant across the construction segments at 3.4 months, versus 2.9 months for the same period in 2015. The test results show that price increases were implemented slightly more frequently this month; and that contractors see scope for further increases in the months ahead. Plans to recruit additional staff in the near future were slightly more widespread and the corresponding survey value reached a markedly high level for the fifth consecutive month. The current October value marks the second highest figure for future developments in staffing numbers ever seen in the nationwide survey for Germany. The highest figure to date was reached in December 2015.