23 January 2019

2019- n° 15

In January 2019, the business climate weakens slightly in the building construction industry Monthly survey of building - January 2019

According to the business managers in the building construction industry surveyed in January 2019, the business climate has weakened slightly. The composite indicator has decreased by one point and has returned to its November 2018 level (109), still significantly higher than the long-term average (100).

Otherwise, the business climate in December 2018 has been slightly revised upward to 110 following a renewal of the survey sample and the integration of late responses of businesses.

In January 2019, slightly fewer business managers than in the previous month have indicated an increase in their activity over the last three months. The corresponding balance has fallen back slightly but remains above its long-term average. Otherwise, the balance of opinion on expected activity remains stable, well above its long-term average. However, business’ managers optimism about the general outlook of the sector has been waning. The corresponding balance has decreased for the fourth consecutive quarter while remaining well above its long-term average.

In January 2019, practically as many business managers as in December 2018 have reported an increase in their staff size over the last three months. The corresponding balance is virtually stable, well above its long-term average. However, employment prospects have deteriorated: the balance of opinion on expected staff size has sharply decreasedand has returned to its October level, well above its long-term average.

In January 2019, farfewer business managers than in the previous month consider that their order books are well filled. The corresponding balance of opinion has fallen back markedly albeit remainingfar above its long-term average. With their present staff size, business managers consider that their order books provide 7.4 months of work, as many as last month and significantly more than the long-term average (5.6 months).

In total, the turning point indicator has gone into the area indicating an uncertain short-term economic situation.

In January 2019, the production capacity utilisation rate is virtually stable after having increased in the previous month. At 90.3%, it stands above its long-term average (88.5%), assince October 2017. At the same time, 38% of business managers have reported production bottlenecks, with a higher-than-average share due to workforce shortage. Three out of four business managers have encountered recruiting problems; however, this share has slipped back for the first time since July 2015 while remaining high (74%), sharply higher than on long-term average (58%).

In January 2019, practically as many business managers as in October 2018 have indicated a deterioration in their cash-flow position. The corresponding balance, virtually stable, stands below its long-term average. At the same time, many more business managers have reported that their customers’ repayment period has been lengthened. The corresponding balance has bounced back markedly after a sharp decrease in the previous quarter. It has returned to its July 2018 level, above its long-term average.

Otherwise, more business managers than in December 2018 have announced that they will increase their prices over the next three months. The corresponding balance has increased again and stands well above its long-term average.