Downturn Deepens In German Construction Sector


Germany’s construction sector contracted at a faster pace in September, survey results from S&P Global showed on Thursday.

The construction Purchasing Managers’ Index fell to 41.8 from 42.6 in August. A reading below 50.0 indicates contraction.

The latest score was the lowest since February 2021, when severe weather disrupted activity.

Activity fell sharply across each of the broad construction categories monitored by the survey.

Housing activity reported the steepest fall, contracting at the fastest pace since April 2020. It was followed by commercial activity, but it shrank only slowly. The final segment, civil engineering, recorded a sharp and accelerated decline that was the fastest since October last year.

The survey showed that new orders declined for the seventh straight month in September as customers put off their orders amid rising prices, higher interest rates and uncertainty towards the economic outlook.

There was a renewed surge in price pressures, driven by the soaring cost of energy. Input price inflation rose to a three-month high. Further, the decline in employment quickened to the fastest since May 2020.

Constructors were much more pessimistic about the year-ahead outlook for activity index in September than in the previous month. Expectations were close to a record low.

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