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Sun June 20 2021

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German construction industry sees modest growth

7 Sep 16 There has been a modest rise in output in all three monitored categories of the German construction sector, according to latest data from the Purchasing Managers’ Index (PMI).

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Civil engineering activity was the best-performing area and survey data signalled that more than a fifth of contractors noted an increase. Commercial building activity returned to growth in August, following a two-month period of decline. Although residential building activity continued to grow, the pace of expansion was the slowest since last October.

New orders have risen for the first time in three months and cost inflation has slowed further. The increased in new business has encouraged building companies to raise their workforce numbers and purchasing activity, though suppliers’ delivery times have continued to lengthen.

The PMI is based on a single question asking respondents to report on the actual change in their total construction activity compared to one month ago. It registered 51.6 in August, unchanged from July and indicative of sustained moderate growth of German construction output. The current period of continuous growth now stretches beyond 1.5 years.

Oliver Kolodseike, economist at IHS Markit, said: “August’s PMI results signalled sustained moderate growth in German construction activity, although the rate of expansion remains considerably weaker than those seen during the first quarter. Part of the weakness can be attributed to only a marginal increase in residential building activity, which rose at the slowest pace since last October.

“Encouragingly, the data pointed to renewed expansions in both civil engineering and commercial building activity and companies reported a rise in new business, suggesting that construction output should continue to grow in coming months.”

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