Informations Rapides · 21 July 2022 · n° 188

In July 2022, the business climate in the building construction industry remains favourable Monthly survey of building - July 2022

In July 2022, the business managers in the building construction industry have cast a judgment less positive than in June on their past activity but remain as optimistic as last month on their activity prospects. Supply difficulties remain acute and a bit less business leaders than the previous month are considering to increase their prices. All in all, the business climate composite indicator has fallen slightly, but remains at a high level (113).

In July 2022, building contractors are slightly less positive than in the previous month about their past activity. The corresponding balance of opinion has fallen, but remains above its long-term average. Business managers are as optimistic as in June about their upcoming activity for the next three months: the corresponding balance of opinion is stable, above its average.

The business managers’ opinion on the general business outlook of the sector, measured quarterly, has fallen for the third consecutive quarter. The corresponding balance remains however far above its average.

More business managers than in the previous month find it difficult for them to predict the future development of their business situation: the balance related to the economic uncertainty felt has rebounded this month.

In July 2022, the production capacity utilisation rate has rebounded. At 92.7%, it stands above its long-term average (88.9%).

Slightly more business managers than in the previous month have reported that obstacles are limiting their production: their proportion has increased at 72%, above its average. Thus, 48% have been facing difficulties due to workforce shortage, a share again on the rise this month and far above its average, and 37% of them have reported supply difficulties, a share virtually stable since May and clearly above its average.

At the same time, the share of companies at the limit of their production capacity, that is to say that could not produce more with their current means if they received more orders, has increased slightly. A little less than half of business managers have reported to be in this situation, against a third in average in the long term. More precisely, more than a quarter of business managers consider themselves both unable to increase their production in case of additional orders and facing difficulties due to a lack of personnel, an increasing share and much larger than in average. The share of business managers unable to increase their production and facing supply difficulties is stable this month, still well above its average.

In addition, the proportion of business managers who declare recruitment difficulties has risen strongly in comparison to April and reaches in July its highest level since October 2007.

In July 2022, fewer business managers than in the previous month are reporting that they will increase their prices over the next three months. The corresponding balance of opinion has fallen again, after reaching its highest level since 1980 in May. It remains at a elevated level, far above its average.

The quarterly balance of opinion on cash-flow position is virtually stable and remains superior to its long-term average. At the same time, the quarterly balance of opinion on payment periods has increased and remains higher than its average.

In July 2022, the balance of opinion on the past change in workforce size over the last three months is stable and lies above its average. The balance on the upcoming change in workforce size over the next three months has improved again, well above its long-term average.

In July 2022, as many business managers as last month have deemed the level of their order books to be higher than usual; the corresponding balance has maintained well above its long-term average. Besides, given their staff size, building contractors consider that their order books provide them with 8.9 months of work, an amount of time slightly higher than the previous month and that remains significantly above its long-term average (5.9 months).

The business climate in the building construction industry of June 2022 has been revised downwards by one point. This revision is mainly due to the inclusion of late responses from companies.