Construction: Capacity Utilisation in Building Construction Hits Record High

The business climate indicator for construction continued to rise in April. According to the results of the Ifo Business Survey, the contractors surveyed were more satisfied with their current business situation than in March. They were, however, slightly more cautious about business developments over the next six months. Although machinery utilisation fell slightly in April, machinery remains well utilised at 76.2%, compared to 72.4% a year previously. Four of ten contractors reported production constraints (April 2015: 49%), with 23% of survey participants reporting constraints due to unfavourable weather conditions (April 2015: 27%). A lack of orders was cited as a constraint by one fifth of the firms surveyed –compared to 25% a year previously. Although the order backlog dropped to 3.1 months, it was still 0.3 months higher than during the same period of the previous year. The survey results suggest that price increases in construction services were implemented slightly less frequently than in recent months. Survey participants expect to see price hikes in the months ahead. Slightly fewer contractors plan to expand their staff bases in the near future.