Construction: Great Confidence in Civil Engineering

According to the ifo Business Survey, the business climate in construction improved slightly, hitting a new national German record. Although the contractors surveyed were less satisfied with their current business situation than last month, their assessments of business developments over the next six months were once again more favourable. Machinery capacity utilisation fell slightly to 77.4% (October 2016: 76.2%). A third of survey participants complained of constraints on construction activity. This figure was one quarter for the same period a year ago. The share of contractors reporting a lack of skilled workers reached its highest level ever at 19%. A lack of orders and poor weather was cited as a constraint by 8% and 7% of the contractors surveyed respectively. On average across construction sectors the order backlog increased slightly by 0.1 months to 3.8 production months. In October 2016 orders in hand were clearly lower at 3.4 months. The survey results reveal that price increases were implemented slightly less often than previously. In the months ahead firms expect slightly greater scope for price increases. More contractors intend to ramp up their staff recruitment in the near future.