Companies reduced their workforce numbers and purchasing activity during the month and the rate of input cost inflation edged up fractionally.
The figures come from the seasonally adjusted Purchasing Managers’ Index (PMI), which 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 remained marginally in growth territory in June, thereby signalling a further expansion in German construction output. However, the figure of 50.7 was down fractionally from May’s 50.8 and the latest index reading was indicative of the weakest rise in activity in the current five-month period of continuous growth.
Continuing the trend that started in April, work on civil engineering building projects fell further during June. However, the rate of decline eased since the previous month and was weaker than that observed throughout the middle of last year. Meanwhile, housing activity increased for a ninth month running, with the pace of expansion little changed since May.
Commercial activity also continued to rise during June. However, the rate of increase softened since May and was the least marked in the current five-month sequence of expansion.
In contrast to the growth trend for activity, German constructors reported a decline in new business in June, thereby ending a three-month run of expansion. The rate of contraction was only fractional overall. A lack of new incoming work meanwhile ended a five-month period of rising buying activity, with the quantity of materials purchased by German constructors broadly unchanged since one month previously.
With new orders decreasing, there was little appetite for companies to hire additional workers. Consequently, employment levels fell for the first time in 2015 so far, with the rate of job shedding modest.
Oliver Kolodseike, economist at Markit said: “German construction output continued to grow at a snail’s pace in June as another contraction in civil engineering activity continued to take the heat out of the recent upturn. Moreover, new orders fell for the first time in four months, which in turn led companies to reduce their workforce numbers for the first time in 2015 so far. The recovery in Germany’s building sector could be put at risk if new order volumes remain depressed and activity growth slows even further.”