Germany's construction activity contracted further in August, at the sharpest rate in three months, survey results from IHS Markit showed Monday.
The construction purchasing managers' index fell to 44.6 from 47.1 in July. Any reading below 50 suggests decline in activity in the sector.
The latest reading was the lowest since May.
Weakening performance in both the commercial and civil engineering sub-sectors continued to drag overall construction activity lower. Further, housing activity decreased for the first time showed its first time in three months.
The rate of contraction in new orders accelerated with firms reporting a lack of public tenders, rising prices and capacity constraints, hurting client demand.
Employment in the construction sector declined at the slowest pace since March.
Purchasing activity declined at the fastest pace in six months but the fall was shallower than those in activity and new orders. Supply delays were rampant, leading to a steep rise in prices for building materials. The pace of inflation was however the slowest since March.
"Nevertheless, the data at least point to a slight improvement in constructors' expectations towards activity over the coming year, albeit with the pessimists still slightly outnumbering the optimists," IHS Markit Economics Associate Director Phil Smith said.
"The sector is struggling to gain any traction, and to add to matters, a fall in residential building work - the sector's main bright spot - created an additional drag on overall activity in August."