Insee conjoncture

In November 2017, the business climate improves markedly in the building construction industryMonthly survey of building - November 2017

According to the business managers in the building construction industry surveyed in November 2017, the business climate has improved markedly. After increasing by one point in October, the composite indicator has risen by two points and has reached 107, its highest level since October 2008, well above its long-term average (100).

Informations rapides N° 305
No 305
Principaux indicateurs
Paru le : 23/11/2017
Prochaine parution le : 25/09/2018 at 08:45 - September 2018

According to the business managers in the building construction industry surveyed in November 2017, the business climate has improved markedly. After increasing by one point in October, the composite indicator has risen by two points and has reached 107, its highest level since October 2008, 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). The uncertainty area is between –0.3 and +0.3

Business managers are much more optimistic about their activity

In November 2017, many more business managers than in the previous month have indicated an increase in their activity over the last three months. The corresponding balance has bounced back and stands far above its long-term average. Likewise, the balance of opinion on expected activity has increased sharply, exceeding its long-term average even more.

Graph3 – Activity tendency in building construction

Table1 – Building industry economic outlook

Balances of opinion, in %, SA
Building industry economic outlook
Mean* Aug. 17 Sept. 17 Oct. 17 Nov. 17
Composite indicator 100 104 104 105 107
Past activity –4 2 7 2 9
Expected activity –6 12 9 8 19
Gen. business outlook –18 13
Past employment –6 –8 –7 –5 –3
Expected employment –5 3 4 4 1
Opinion on order books –24 –20 –22 –13 –14
Order books (in month) 5.5 7.3 7.3 7.5 7.4
Production capacity utilisation rate 88.4 88.4 88.1 88.7 88.7
Obstacles to production increase (in %) 32 30 27 32 34
- Because of workforce shortage (in %) 13.7 9.7 8.8 9.8 10.0
Recruiting problems (in %) 57 58
Expected prices –15 –8 –6 –3 –5
Cash-flow position –10 –7
Repayment period 29 30
  • * 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

Slightly more business managers report an increase in their past staff size

In November 2017, slightly more business managers than in October have reported an increase in their staff size over the last three months. The corresponding balance has increased slightly and stands above its long-term average. However, the balance of opinion on expected staff size has fallen back while remaining well above its long-term average.

Graph4 – Workforce size tendency in building construction

Order books remain judged well filled

In November 2017, almost as many business managers as in the previous month consider that their order books are well filled for the period. After reaching a level unseen since September 2008, the corresponding balance of opinion is virtually stable well above its long-term average. With their present staff size, business managers consider that their order books provide 7.4 months of work, a level slighlty lower than last month but clearly above its long-term average (5.5 months).

Graph5 – Order books

Production capacity remains more used than on average

After bouncing back in the previous month, the production capacity utilisation rate is stable in November 2017. At 88,7%, it stands above its long-term average (88.4%) for the second consecutive month. At the same time, 34% of business managers have reported production bottlenecks, slightly more than last month and than in long-term average.

Graph6 – Production capacity utilisation rate

Fewer business managers plan to increase their prices

In November 2017, fewer business managers than in October have indicated that they would increase their prices over the next three months. The corresponding balance has fallen back slightly but remains well above its long-term average.