Construction: Confidence continues to fade

In construction, the business climate cooled slightly once again in May. The assessments of the current business situation improved slightly, but with respect to the six-month business prospects the surveyed construction companies were somewhat less optimistic than in the previous month. Construction activity declined, seasonally and weather-adjusted; the rate of equipment utilisation at 72% (seasonal and weather adjusted) was lower by almost one percentage point over the last survey. More than a quarter (27%) of the survey participants reported construction constraints: 19% of the contractors (previous year: 18%) complained of a lack of orders. Bad weather, labour shortages, material shortages, financial difficulties and order cancellations played hardly a role, similar to last year. On average, the construction sectors increased the range of order stocks slightly, to 2.8 months of production (seasonal and weather adjusted), exactly matching the previous-year level. On balance, about one in seven surveyed contractors assessed current order books as too small. The survey responses indicate that construction prices have been raised in many instances, and the contractors expect this to continue. While staff levels are likely to increase in western Germany, a stagnation of employment levels is expected in eastern Germany.