24 July 2019

2019- n° 186

In July 2019, the business climate remains stable at a high level in the building construction industry Monthly survey of building - July 2019

According to the business managers in the building construction industry surveyed in July 2019, the business climate remains stable. The composite indicator has stood at 111 for the sixth consecutive month, largely above its long-term average (100).

In July 2019, many more business managers than in the previous month have indicated an increase in their activity over the last three months. The corresponding balance has increased again and has exceeded more largely its long-term average. However, business managers are less optimistic about their activity prospects: the balance of opinion on expected activity has slipped back sharply after two consecutive increases in May and June. It remains however above its long-term average. About the general outlook of the sector, business managers are a little more confident than in the previous quarter: the corresponding balance of opinion has increased slightly and stands well above its long-term average.

In July 2019, as many business managers as in June have reported an increase in their staff size over the last three months. The corresponding balance is stable above its long-term average. However, employment prospects have tarnished: the balance of opinion on expected staff size has decreased again while remaining above its long-term average.

In July 2019, slightly fewer business managers than in the previous month consider that their order books are well filled. The corresponding balance of opinion has fallen back but remains above its long-term average. With their present staff size, business managers consider that their order books provide 7.8 months of work, a volume slightly lower than last month but higher than the long-term average (5.6 months).

The turning point indicator has gone into the uncertainty area.

In July 2019, the production capacity utilisation rate has decreased slightly. It stands now at 91.6%, above its long-term average (88.6%). At the same time, 45% of business managers have reported production bottlenecks, against one out of three on long-term average. This share has increased slightly compared to the previous month. Furthermore, 26% of business managers have declared production bottlenecks due to workforce shortage, a share slightly higher than last month and well above its long-term average (14%). These two shares stand at their highest level since September 2008. Moreover, three business managers out of four encounter difficulties to hire; this share, in slight decrease in July, has tended to stabilise for three quarters after having increased continuously between July 2015 and October 2018. It remains much higher than in long-term average (58 %).

In July 2019, as many business managers as in April 2019 have indicated an improvement in their cash-flow position. The corresponding balance is stable above its long-term average. At the same time, fewer business managers have indicated an increase in the repayment period of their customers. The corresponding balance has decreased again and has gone below its long-term average.

In July 2019, more business managers than in July have announced that they will increase their prices over the next three months. The corresponding balance has recovered and stands well above its long-term average.