Construction: Employment Expectations Reach Record Level

The business climate in construction clouded over slightly towards the end of the year. According to the results of the Ifo Business Survey, the contractors surveyed were slightly less satisfied with their current business situation than recently, but expressed greater optimism about their six-month business outlook. The capacity utilisation rate rose to 74.2% and was thus 0.4 percentage points higher than the figure for the same period last year. 27% of companies reported constraints on construction, mainly due to a lack of orders (15%). Other factors like a lack of workers (5%) and unfavourable weather conditions (6%) played a subordinate role. The order back log dropped to 2.8 months, which corresponds to the level seen in December 2014. On balance, more contractors expect construction activity to expand over the next three months. According to reports by firms, price hikes were implemented less frequently, but they expect greater scope for increases in the near future. Contractors expect to further expand their staff base in the months ahead. Employment expectations reached their most positive level since the beginning of the Germany-wide survey at the beginning of 1991.