Seasonal slowdown?

After a dip in june, sentiment about the European construction industry bounced back in July, with the industry once again feeling upbeat about future prospects. Unsurprisingly, the levels of activity reported in July were significantly lower than they were in June, due it would seem to the start of the holiday season.

Sentiment about the current situation fell from a positive balance of +25,4% in June to +19,3% in July. This was the third consecutive month that this balance figure – arrived at by subtracting the number of respondents who said activity was worse from the number who said it was better – has fallen.

This could mean that activity levels in the construction industry are slowing, or it could just reflect a seasonal lull due to the summer holiday period.

Respondents in July were much more up-beat about the industry's future outlook than they were in June, indicating perhaps that this is a seasonal factor, rather than a more serious downturn. Asked about future business expectations, a balance of +53,3% said they expected activity to be higher in a year's time than currently, up sharply from June's result of +39,5%.

Looked at over the course of the year, the June result seems to be something of a 'blip' in the data, with July's result about the future being much more in line with previous months'. Although this sentiment is still very strong, there is a still a steady decline in the figures from the high of +61% in January.

The slightly weaker data for the current situation means the arrow of our clock is a little short than it was earlier in the year, particularly compared to the first four months of 2007. However, results are still very up-beat, and strong sentiment about the future indicates the respondents to the CE Barometer survey think the current boom is yet to peak.