Business climate : weather conducive to the building this summer

Looking good for the business climate indicator synthesis has never been as high since 9 years. And prospects are also favourable. Insee delivers its monthly bulletin on economic conditions in the building industry for the month of July 2017.
All the metaphors in weather can be made : the beautiful season seems to be back in the building world. Interviewed – as in every month by the Insee, the heads of companies said that the situation continues to improve, reaching a level of 105, “its highest level since September 2008“. Remember, that it was passed under the bar 90 at the beginning of 2015 and that its long-term average is 100. The level is however still well below the highs of the beginning of the year 2008, when it tutoyait 120, and in the year 2000, when it exceeded even the 125…


Regarding the general outlook, they are always improving. “In July 2017, the entrepreneurs are less numerous than in June to report an increase in their activity over the last three months, “notes the Insee, which emphasizes that the balance remains “well above its average level of long-term” and that activity is anticipated to rise. And the order books continue to be garnished. In both cases, the levels reached are respectively those of march and October 2008.


Hiring rates and cash flow improved


On the side of the job, the contractors have logically adapted their workforce to the renewed activity, the strengthening over the last three months. “The balance of opinion on expected workforce size, already significantly higher than its long-term average, continues to increase, “says the bulletin. Given these numbers, the leaders of the construction companies believe that the orders gathered until now represents 7.3 months of work, which is well above the long average (5.5 months).
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The production capacities are thus almost used to the full. In the month of July, the rate rose to 88,2 %, very close to the long-term trend (88,4 %). The part of the contractors ‘ reports of bottlenecks in the production is, also, in the standard (31 % today vs. 32% in the long-term average). They have slightly less difficulty in recruiting than before (55% vs. 57 %). Finally, for their cash flow, the managers reported an improvement of their situation. They are significantly less likely to report increases in the payment deadlines of their clients. And they are announcing, therefore, wish to review their prices up in the coming months.


In considering all of the indicators in this dashboard, we can therefore approximate the level of activity to what it was between the spring and the summer of 2008. A leap forward that is finally back to levels forgotten.

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