04.09.202607:42:40UTC+00Germany Construction Activity Hits 8-Month High

The S&P Global Germany Construction PMI Total Activity Index climbed sharply to 48.7 in August from 42.1 in July, reaching an eight-month high and signalling the slowest decline in activity since the downturn began at the start of the year. The overall improvement was driven primarily by commercial construction, where activity increased for the first time in more than a year, while the downturn in residential building eased markedly.

Business confidence also improved modestly. However, civil engineering slipped back into contraction following a slight expansion in July, and new orders continued to decline as elevated prices and higher borrowing costs dampened demand. Employment fell for the seventh consecutive month, with the rate of job shedding accelerating to its fastest since April.

Input cost inflation picked up for the first time in four months, reversing July’s five-month low, and supplier delivery times lengthened again. Looking ahead, construction firms remained pessimistic, pointing to weak new order inflows, persistently high costs, pressure on incomes and heightened risks linked to the conflict in the Middle East.