Construction: Capacity Utilisation Hits New High in Structural Engineering

The business climate in construction ended the year by improving for the ninth consecutive month. According to the results of the Ifo Business Survey, both the survey values and the six-month business outlook hit a new record high. Machinery capacity utilisation rose by 1.2 percentage points to 76.3% and was thus clearly far above the value for the same period last year of 74.1%. Around 30% of contractors reported constraints on construction activity. 12% of contractors cited a lack of orders and/or the influence of bad weather (December 2015: 6%) as constraints. Moreover, 9% of the contractors surveyed complained of a lack of qualified workers. The order backlog stagnated at 3.5 months; during the same period of the previous year order backlogs were just 2.7 months. On balance, around 3% of contractors reported their order buffer to be relatively large. During the same period last year, by contrast, the prevailing consensus was that the order backlog was too small, a view confirmed by almost 15% of contractors. According to contractors, price increases were implemented on a similarly frequent basis as last month. They expect further scope for price increases in the future. Contractors will continue to grow their staff base personnel in the months ahead. Employment expectations have not been this positive since the launch of the post-unification survey at the beginning of 1991.