21 June 2018
2018- n° 158In June 2018, the business climate is virtually stable in the building construction
industry Monthly survey of building - June 2018
According to the business managers in the building construction industry surveyed in June 2018, the business climate is virtually stable. After remaining at 108 in May, the composite indicator has slightly increased and has reached 109, a significantly higher level than the long-term average (100).
- The business managers' opinion on their past and expected activity remains favourable
- A smaller proportion of business managers reporting an increase in their past staff size
- More business managers consider that their order books are well filled
- Higher pressure on production capacity
- Prices remain mostly expected to rise
According to the business managers in the building construction industry surveyed in June 2018, the business climate is virtually stable. After remaining at 108 in May, the composite indicator has slightly increased and has reached 109, a significantly higher level than the long-term average (100).
graphiqueGraph1 – Business climate composite indicator
The turning point indicator has returned into the favourable outlook area.
graphiqueGraph2 – 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
The business managers' opinion on their past and expected activity remains favourable
In June 2018, practically as many business managers as in the previous month have indicated an increase in their activity over the last three months. The corresponding balance is virtually stable clearly above its long-term average. Likewise, the balance of opinion on expected activity is virtually stable well above its long-term average.
graphiqueGraph3 – Activity tendency in building construction
tableauTable1 – Building industry economic outlook
| Mean* | March 18 | April 18 | May 18 | June 18 | |
|---|---|---|---|---|---|
| Composite indicator | 100 | 107 | 108 | 108 | 109 |
| Past activity | –4 | 14 | 10 | 6 | 5 |
| Expected activity | –6 | 12 | 16 | 11 | 12 |
| Gen. business outlook | –17 | 18 | |||
| Past employment | –6 | 0 | 4 | 9 | 5 |
| Expected employment | –4 | 13 | 11 | 10 | 11 |
| Opinion on order books | –24 | –14 | –18 | –16 | –11 |
| Order books (in month) | 5.6 | 7.3 | 7.4 | 7.3 | 7.4 |
| Production capacity utilisation rate | 88.5 | 89.1 | 89.7 | 89.7 | 90.1 |
| Obstacles to production increase (in %) | 32 | 32 | 32 | 35 | 37 |
| - Because of workforce shortage (in %) | 13.7 | 12.3 | 11.7 | 14.9 | 16.4 |
| Recruiting problems (in %) | 57 | 67 | |||
| Expected prices | –14 | 4 | 5 | 5 | 5 |
| Cash-flow position | –10 | –8 | |||
| Repayment period | 29 | 27 |
- * 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
A smaller proportion of business managers reporting an increase in their past staff size
In June 2018, fewer business managers than in May have reported an increase in their staff size over the last three months. The corresponding balance has fallen back while remaining well above its long-term average. Employment prospects remain judged favourable: the balance of opinion on expected staff size has slightly increased and stands well above its long-term average.
graphiqueGraph4 – Workforce size tendency in building construction
More business managers consider that their order books are well filled
In June 2018, markedly more business managers than in the previous month consider that their order books are well filled. The corresponding balance of opinion has increased sharply, exceeding more largely its long-term average. With their present staff size, business managers consider that their order books provide 7.4 months of work, a level close to that of last month and significantly higher than the long-term average (5.6 months).
graphiqueGraph5 – Order books
Higher pressure on production capacity
In June 2018, the production capacity utilisation rate has increased after being stable in the previous month. At 90.1%, it has reached its highest level since December 2008. It has stood above its long-term average (88.5%) since October 2017. At the same time, 37% of business managers have reported production bottlenecks, more than in the previous month and on long-term average. In particular, the proportion of business managers who have reported production bottlenecks because of workforce shortage follows the upward trend started two years ago. This share has risen again in June (16.4% after 14.9%) and has stood above its long-term average (13.7%) for two months.
graphiqueGraph6 – Production capacity utilisation rate
Prices remain mostly expected to rise
In June 2018, as many business managers as in April and May have indicated that they will increase their prices over the next three months. The corresponding balance remains stable and clearly above its long-term average.
Documentation
Abbreviated methodology (pdf,177 Ko)
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