Informations Rapides · 21 October 2021 · n° 272

In October 2021, the business climate remains favourable in the building construction industry Monthly survey of building - October 2021

In October 2021, the business managers in the building construction industry remain rather confident about the activity prospects. The composite indicator is stable at 113, largely above its long-term average. However, the obstacles to production due to workforce shortage and to supply difficulties are getting somewhat greater. Moreover, the balance of opinion on the expected change in prices has strongly increased this month.

In October 2021, building contractors are a bit less optimistic than in the previous month about their upcoming activity: the corresponding balance has decreased slightly while staying significantly above its long-term average. At the same time, the balance of opinion of business managers on their activity over the last three months has decreased, for the fourth consecutive month, while remaining well above its average.

However, the business managers’ opinion on the general business outlook of the sector, measured quarterly, has kept improving: the corresponding balance of opinion stands well above its long-term average.

Overall, more business managers than in the previous month find it difficult to predict the evolution of their business. The corresponding balance has rebounded after having declined since April 2021, when the question was first asked to business managers.

In October 2021, the production capacity utilisation rate is virtually stable. At 92.6%, it stands above its long-term average (88.8%).

As many business managers as last month have reported that obstacles are limiting their production: their proportion has been virtually stable since June 2021. Almost half of business managers are facing difficulties due to workforce shortage, a share strongly increasing this month, and 30% of them are reporting supply difficulties, a share also rising in comparison to last month.

At the same time, the share of companies at the limit of their production capacity, that is to say that could not produce more with their current means if they received more orders, is slightly higher than in September 2021. Since July, nearly half of business managers have reported to be in this situation, against a third in average in the long term. More precisely, a quarter of business managers consider themselves both unable to increase their production in case of additional orders and facing difficulties due to a lack of personnel, a share virtually stable and stronger than in average. Likewise, the share of business managers unable to increase their production and facing supply difficulties has barely changed since July, and remains much higher than in average.

In October 2021, business managers are much more numerous than in the previous month to report that they will increase their prices over the next three months. The corresponding balance has sharply risen, after having quickly increased in the first half-year of 2021, then reached a standstill between July and September. It stands at a level far above its long-term average.

Otherwise, fewer business managers than in July have indicated an improvement in their cash-flow position. The corresponding balance has decreased again but remains superior to its long-term average. At the same time, the balance of opinion on payment periods has increased but remains inferior to its long-term average.

In October 2021, the balance of opinion of business managers about the upcoming change in their workforce size for the next three months has recovered, and remains far above its long-term average. The balance of opinion on the past change in workforce size over the last three months has increased as well and stands markedly above its average.

In October 2021, slightly fewer business managers than last month have deemed the level of their order books to be higher than usual; nevertheless the corresponding balance remains well above its long-term average. Besides, given their staff size, the construction business managers consider that their order books provide 8.7 months of work, an amount of time as high as in the previous month and that remains significantly above its long-term average (5.8 months).