Construction: Optimism Wanes

The climate indicator for construction fell short of its previous record high this month. After a moderate decline, the indicator returned to the exactly the same level reached in August. This still leaves it at an extraordinarily good level by long-term comparison. The decline was primarily due to a poorer business outlook. The majority of contractors were nevertheless confident about future developments over the next six months. The current business situation, however, deteriorated only slightly in November, leaving the corresponding indicator only slightly below the all-time historical high seen in October. The capacity utilisation rate rose marginally to 79.7%, versus 78.4% for the same period a year ago. In November, 37.7% of participants reported construction constraints, representing a decline of 3 percentage points. Although less-frequently cited, 17.4% of contractors reported the labour shortage as the biggest constraint on their activities (versus 18.1% in October). In the most recent survey, 6.8% of contractors complained of a lack of orders (versus 6.5% last month). This was followed by a shortage of materials, which affected 5.4% of the companies surveyed (versus 6.5%). The average order backlog rose by 0.3 months to the exceptionally high level of 4.2 months. This corresponds to a sharp increase of 0.7 months within a year. Slightly fewer survey participants reported increasing their construction prices. For the coming months, on the other hand, they see considerable scope for further price hikes. With recruitment expansionary on balance, contractors plan to hire slightly more staff.