In April 2017, the economic climate remains stable in the building construction industryMonthly survey of building - April 2017

According to the business managers in the building construction industry surveyed in April 2017, the business climate remains stable. The composite indicator stands at its long term average (100) for the third consecutive month. Its March level has been revised upward by one point since the first estimate, to 100, because of late businesses' answers that have been taken into account.

Informations rapides
No 104
Paru le : 25/04/2017
Prochaine parution le : 26/09/2017 at 08:45 - September 2017

According to the business managers in the building construction industry surveyed in April 2017, the business climate remains stable. The composite indicator stands at its long term average (100) for the third consecutive month. Its March level has been revised upward by one point since the first estimate, to 100, because of late businesses' answers that have been taken into account.

Graph1 – Business climate composite indicator

The turning point indicator remains in the favourable outlook zone.

Graph2 – Turning-point indicator

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

Business managers' opinion on their expected activity has improved sharply

In April 2017, practically as many business managers as in March have indicated a decrease in their past activity. The corresponding balance stands slightly below its long-term average. In contrast, the balance of opinion on expected activity has increased sharply. It has reached its highest level since March 2008, well above its long term-average. Likewise, business managers' opinion about the general outlook has improved. The corresponding balance of opinion stands well above its long-term average.

Graph3 – Activity tendency in building construction

Table1 – Building industry economic outlook

Balances of opinion, in %, SA
Building industry economic outlook
Mean* Jan. 17 Feb. 17 March 17 April 17
Composite indicator 100 99 100 100 100
Past activity –4 9 0 –5 –6
Expected activity –6 –5 –3 2 10
Gen. business outlook –18 0 6
Past employment –6 –15 –11 –9 –14
Expected employment –5 –7 –10 –6 –7
Opinion on order books –24 –31 –30 –32 –29
Order books (in month) 5.5 6.8 6.9 7.0 6.7
Production capacity utilisation rate 88.4 87.1 87.0 87.3 87.4
Obstacles to production increase (in %) 32 25 25 27 29
- Because of workforce shortage (in %) 13.9 5.1 5.2 5.9 6.6
Recruiting problems (in %) 57 48 51
Expected prices –15 –13 –14 –13 –13
Cash-flow position –10 –19 –10
Repayment period 30 32 30
  • * Mean since September 1993.
  • Source: INSEE, French business survey in the building industry

More business managers have indicated a cut in their past staff size

In April 2017, more business managers than in March have indicated a drop in their staff size over the last three months. The corresponding balance stands far below its long-term average. The balance of opinion on expected employment is virtually stable, slightly below its long-term average.

Graph4 – Workforce size tendency in building construction

Order books fill up

In April 2017, fewer business managers than in March consider that their order books are poorly filled for the period. While it has improved regularly for two years, the corresponding balance of opinion remains below its long-term average. With their present staff size, business managers consider that their order books provide 6.7 months of work, a lower level than last month but higher than its long-term average (5.5 months).

Graph5 – Order books

Production capacity is slightly more used

After having weakly hovered around 87% between August 2016 and February 2017, the production capacity utilisation rate has improved again since March. In April 2017, it has increased slightly, further to 87.4%. However, it has remained below its long-term average (88.4%) since January 2012. The part of business managers indicating production bottlenecks is 29%, slighly lower than the average since 1993 (32%). Moreover, 51% of business managers have encountered recruiting problems, more than in January 2017, but less than on long-term average (57%).

Graph6 – Production capacity utilisation rate

Fewer business managers have announced a decline in the cash-flow position

In April 2017, far fewer business managers than in January have indicated a decline in their cash-flow position. The corresponding balance has returned to its long term-average. Furthermore, slightly more business managers have indicated a drop in their customers' repayment period.

In addition, as many business managers as in March have announced that they will going to reduce their prices during the next three months. The corresponding balance stands slightly above its long-term average.