Winter blues

Sentiment about the strength of the construction industry weakened markedly in November according to this month's CE Barometer survey. Although results remained firmly in positive territory, the percentage of up-beat responses were the lowest since the survey was started at the end of 2006.

Asked about the current level of activity compared to a month ago, a balance of +16,9% of respondents said they were busier in November than October. This was down sharply from October, when the figure stood at +31,1%, and only just above the low of +16,8% seen in August. The balance is calculated by subtracting the number of respondents who said activity was worse from the number who said it was better.

Compounding the weak sentiment were respondent's views about the industry's future. A balance of +33.3% said they expected activity to be higher in a year's time. It was still a strongly positive result, but at the same time it is the lowest this figure has been and a long way from the +61,3% figure seen in January.

The fact that respondents were more up-beat about prospects in a year's time, than they were about current activity levels indicates that the peak of the cycle has still not been reached. However, the strength of sentiment has clearly weakened.

There are a number of possible explanations for this. One relates to the seasonal nature of construction.

Winter is here now, and month-to- month activity levels naturally fall with poorer weather conditions and less daylight.

Another possibility is that the effect of the last few months“ stock market turmoil is beginning to be felt in the industry. Although most of the problems are in the US, it is plausible that confidence among Europe's construction fraternity has slipped a little as a result.