Construction: Order Reserves Reach New Record High

The Ifo Business Climate for the construction industry remained at the all-time high reached in July. Although the surveyed companies were slightly less satisfied with their current business situation than in the previous month, they are slightly more optimistic regarding the six-month outlook. The equipment utilisation rate remained unchanged at 74.8%, down 1.7 percentage points on the previous year. A quarter of the survey participants reported construction constraints, mainly due to a shortage of orders and skilled workers (9% each). On average for all construction sectors, order reserves rose to a record level of 3.4 months. On balance, only 1.3% of companies surveyed described their order backlogs as too small (August 2015: 19.6%). The survey responses indicate that prices were raised as often as in the last survey. In the coming months, the scope for price increases should decrease, however. The surveyed contractors expect a further increase in the number of employees – this survey value is at the third highest level since the beginning of the all-German polling at the beginning of 1991.