In August 2017, the economic climate is a little less favourable in the building construction industryMonthly survey of building - August 2017

According to the business managers in the building construction industry surveyed in August 2017, the business climate is a little less favourable than last month. After three consecutive months of increase, the composite indicator has decreased by one point. At 104, it remains however well above its long-term average (100).

Informations rapides
No 218
Paru le : 24/08/2017
Prochaine parution le : 23/11/2017 at 08:45 - November 2017

According to the business managers in the building construction industry surveyed in August 2017, the business climate is a little less favourable than last month. After three consecutive months of increase, the composite indicator has decreased by one point. At 104, it remains however well above its long-term average (100).

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

Fewer business managers have indicated an increase in their past activity

In August 2017, again fewer more business managers than in the previous month have indicated an increase in their past activity. The corresponding balance remains however well above its long-term average. Otherwise, the balance of opinion on expected activity is stable, also 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* May 17 June 17 July 17 Aug. 17
Composite indicator 100 103 104 105 104
Past activity –4 5 10 5 2
Expected activity –6 1 3 11 11
Gen. business outlook –18 13
Past employment –6 –6 –5 –2 –6
Expected employment –5 –1 3 6 3
Opinion on order books –24 –28 –24 –21 –20
Order books (in month) 5.5 7.1 7.2 7.4 7.4
Production capacity utilisation rate 88.4 87.8 87.9 88.5 88.2
Obstacles to production increase (in %) 32 29 29 31 31
- Because of workforce shortage (in %) 13.8 7.3 7.1 9.4 9.5
Recruiting problems (in %) 57 55
Expected prices –15 –16 –13 –6 –9
Cash-flow position –10 –9
Repayment period 29 20
  • * Mean since April 1975 for the composite indicator and since September 1993 for the balances of opinion.
  • Source: INSEE, French business survey in the building industry

Fewer business managers plan to increase their staff size

In August 2017, significantly fewer business managers than in July have indicated an increase in their staff size over the last three months. The corresponding balance has returned to its long-term average. Likewise, fewer of them plan to recruit: the balance on expected staff size has fallen back sharply for the first time since March 2017. It remains however above its long-term average.

Graph4 – Workforce size tendency in building construction

Order books remain well filled

In August 2017, a little more business managers than in July consider that their order books are well filled for the period. The corresponding balance of opinion has recovered regularly for two years and a half and has exceeded its long-term average for two months. With their present staff size, business managers consider that their order books provide 7.4 months of work, the same level as last month and clearly higher than its long-term average (5.5 months).

Graph5 – Order books

Production capacity is slightly less used

After five months of steady increase, the production capacity utilisation rate has decreased slightly in August 2017. It stands at 88.2% and has returned below its long-term average (88.4%). Among business managers, 31% have reported production bottlenecks, the same share as last month and a shade below its long-term average.

Graph6 – Production capacity utilisation rate

Fewer business managers plan to increase their prices

In August 2017, fewer business managers than in July have indicated that they would increase their prices over the next three months. The corresponding balance remains however well above its long term-average.