23 October 2019

2019- n° 275

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

According to the business managers in the building construction industry surveyed in October 2019, the business climate is stable. The composite indicator stands at 112, its highest level since May 2008, largely above its long-term average (100).

In October 2019, almost as many business managers as in the previous month have indicated an increase in their activity over the last three months. The corresponding balance has slightly fallen back while remaining above its long-term average. However business managers are more optimistic about their activity prospects: the balance of opinion on expected activity has grown for the third consecutive month. It thus remains well above its long-term average. Furthermore, business managers’ opinion on the general business outlook of the sector are even more favourable than in last July: the corresponding balance of opinion has increased for the third consecutive trimester and exceeds largely its long-term average.

In October 2019, more business managers have reported that they had increased their staff size in the last three month. The balance of opinion on expected staff size has edged up. It has oscillated since the beginning of the year around a level well above its average. However, the employments prospects are less favourable than in September: the corresponding balance has decreased a bit but stays nevertheless above its long-term average.

In October 2019, slightly less business managers than in the previous month consider that their order books are well filled. The corresponding balance of opinion has decreased a bit but stays largely above its long-term average. With their present staff size, business managers consider that their order books provide 8.1 months of work, as much as last month and significantly more than the long-term average (5.7 months).

The turning point indicator remains in the area indicating a favourable short-term economic situation.

In October 2019, the production capacity utilisation rate is stable after an increase in the two previous months. It stands at 91.7%, above its average (88.6%). At the same time, 47% of business managers have reported production bottlenecks, as last month and far more than the long-term average. Furthermore, 27% of business managers have declared production bottlenecks due to workforce shortage. Three-quarters of the business managers face difficulties in recruiting staff. The share, virtually stable since April 2019, stands largely above its long-term average (58%).

In October 2019, almost as many business managers as in July have announced an improvement of their cash-flow position. The corresponding balance remains higher than its long-term average. In the same time, more business managers have reported a lengthening of payment periods. The corresponding balance has bounced back after a decrease in the previous quarter. It stays nevertheless below its long term average.

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