Construction: Current Business Situation Remains Excellent

The business climate in construction improved somewhat in February, according to the results of the Ifo Business Survey. Assessments of the current business situation were markedly more favourable and the corresponding survey value climbed to a new record high. At the same time, however, the contractors surveyed expressed less optimism about the near future for the fourth month in succession. Machinery capacity rates were 76.5% and thus higher than during the same period last year (74.0%). 58% of contractors surveyed reported constraints on construction activities. 43% cited bad weather as the cause (February 2015: 51%); while over a fifth of the contractors surveyed complained of a lack of orders (February 2015: 26%). For the construction segments on average, the order back log fell to 2.9 months, which was still higher than their level at the same period last year of 2.8 months. According to company reports, price hikes were implemented more frequently than previously. However, contractors do not see much further scope for price increases over the next three months. Contractors still expect to hire more staff in the near future.