However, there were further marked reductions in both commercial and civil engineering work as intakes of new orders continued to fall sharply.
Expectations over future performance were also down on the month, though there was a return to job creation across the sector following a decline in employment during August.
The seasonally adjusted Germany Construction Purchasing Managers’ Index (PMI) – a single-figure snapshot of overall activity in the construction economy – was at a five-month high of 48.6 in September, up from August’s mark of 47.8. The headline index has posted below 50.0 in each of the past six months. Figures lower than 50 signify a fall.
Decreased total industry activity reflected further considerable reductions in work on both commercial and civil engineering projects in September. Civil engineering activity fell at the steeper rate, and one that was faster than during August. In contrast to the general trend, however, home-building increased for the first time in six months and at a relatively solid rate.
Intakes of new orders at German constructors again fell sharply during September. According to anecdotal evidence, the month-on-month decrease was primarily the consequence of weakening demand in the wider economy.
Reduced invitations to tender weighed on business confidence in September, with companies on balance anticipating a decline in activity levels at their units in the forthcoming year. Moreover, the outlook was the most pessimistic since last December. Anecdotal evidence highlighted particular concern over a lack of public sector contracts. In spite of the trends in output, new business and expectations over future performance, German constructors added to their workforces during September. The increase in staffing numbers – the third in the past four months – broadly offset job cuts that were made during the preceding survey period.
With workloads decreasing in September, the amount of materials purchased by constructors operating in Germany decreased for a second straight month. The rate of decline quickened slightly since August but remained only modest overall. The time taken for suppliers’ to deliver materials meanwhile lengthened again, extending the ongoing sequence of deterioration to two-and-a-half years. The rate of lead-time lengthening was quicker than one month before and relatively marked.
September data pointed to an increase in average purchase prices facing German construction firms. Input price inflation quickened from August’s 30-month low, although remained slower than the historical trend.
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