Construction: order reserves in structural engineering at record high

According to the results of the Ifo Business Survey, the business climate in construction deteriorated again somewhat in March. After the record high in the previous month, the surveyed contractors assessed their current situation less favourably. However, the business outlook for the coming months improved slightly. The depth of order backlogs rose to an average of 3.2 months (seasonally and weather adjusted); a year ago at 2.8 months the reserves were significantly smaller. The equipment utilisation rate in the construction sector increased for the fifth time in succession, climbing from 76.6% to 77.2%. This is the highest value since March 2014 (seasonally and weather adjusted). Of the surveyed contractors, an almost unchanged 58% reported construction constraints: nearly 44% indicated unfavourable weather conditions (previous year: 45%), while 22% of the companies complained of low order levels (previous year: 29%). Labour shortages were reported by only 2% of the respondents as a construction constraint. According to the survey results, price hikes were achieved less frequently than previously. In the coming months, the scope for price increases should continue to decline. The number of employees is expected to continue to expand clearly in the near future, even though the employment expectations have deteriorated somewhat.