In January 2016, the economic climate continues to improve slightly in the building construction industryMonthly survey of building - January 2016

According to the business managers surveyed in January 2016, the business climate has improved slightly in the building construction industry. The composite indicator which measures it has increased by one point again but remains significantly below (93) its long-term average (100). The turning point indicator remains in the zone indicating a short-term economic uncertainty.

Informations rapides
No 17
Paru le : 21/01/2016
Prochaine parution le : 26/09/2017 at 08:45 - September 2017

According to the business managers surveyed in January 2016, the business climate has improved slightly in the building construction industry. The composite indicator which measures it has increased by one point again but remains significantly below (93) its long-term average (100). The turning point indicator remains in the zone indicating a short-term economic uncertainty.

Climate – Business climate composite indicator

TurningPoint – Turning-point indicator

  • Note: close to 1 (respectively −1), it indicates a favourable climate (respectively unfavourable) ), between +0.3 and −0.3: uncertainty area..

Tableau1 – Building industry economic outlook

Balances of opinion, in %, SA
Building industry economic outlook
Mean* Oct. 15 Nov. 15 Dec. 15 Jan. 16
Composite indicator 100 90 91 92 93
Past activity –4 –16 –11 –8 –10
Expected activity –7 –19 –19 –6 –12
Gen. business outlook –19 –24 –21
Past employment –5 –30 –30 –28 –25
Expected employment –4 –24 –24 –23 –23
Opinion on order books –23 –53 –49 –51 –46
Order books (in month) 5.4 6.5 6.4 6.4 6.4
Production capacity utilisation rate 88.5 84.6 84.9 84.6 84.7
Obstacles to production increase (in %) 32 19 20 20 20
- Because of workforce shortage (in %) 14.4 2.7 2.8 3.1 3.0
Recruiting problems (in %) 58 40 43
Expected prices –15 –32 –30 –30 –27
Cash-flow position –10 –13 –21
Repayment period 29 38 40
  • * Mean since September 1993.

Business managers are a little less pessimistic about the general outlook in the construction sector

In January 2016, the balances of opinion on past and expected activity have fallen back after having recovered. The balance corresponding on expected activity has returned below its long-term average. However, with regard to the general outlook in the sector for the next few months, the business managers' opinion has improved slightly: the corresponding balance has got up closer to its long-term average.

Activity – Activity tendency in building construction

A little less pessimism about employment

In January 2016, slightly fewer business managers than in December have indicated a fall in their staff size during the three last months. Concerning expected employement, the balance of opinion is stable at a level substantially below its long-term average.

Workforce – Workforce size tendency in building construction

Order books have been considered as very low again

Business managers continue to consider that their order books are much lower than normal, even if fewer business managers than in December have declared a fall in their order books. The corresponding balance has improved gradually for one year. With their staff size, business managers consider that their order books provide 6.4 months of work, a level stable and above its long term average (5.4 months).

OrderBooks – Order books

Since 2008, the production capacity utilisation rate has stood below its long-term average. In December 2015, it is virtually stable at 84.7 %. Almost one business manager out of five has reported difficulties in increasing output, against one out of three in average since 1993. Only 43 % of construction firms have experienced difficulties in recruiting labor force, against 58 % in average. However, this share has increased by three percentage points compared to October 2015 and has reached its highest level since July 2014.

Pcur – Production capacity utilisation rate

Deteriorating cash position

In January 2016, slightly fewer business managers than in December have forecasted price falls. The corresponding balance remains substantially below its long-term average. More business leaders indicate that their cash-flow position is more deteriorated than in the previous quarter and that the repayment periods tend to lengthen.