In July this year, Germany's construction sector PMI indicated a slight increase to 51.6 from the ten-month low of 50.4 recorded in June, according to Markit's seasonally adjusted Germany Construction Purchasing Managers' Index (PMI).
July data showed a further expansion in German construction work, driven by sustained growth in residential building activity. However, declines were reported in both civil engineering and commercial building output and new business fell for a second month running. Moreover, firms reported the worst outlook for construction output since last November. Meanwhile, companies were encouraged to further add to their payrolls and raise their input buying activity.
“It’s a bit of a relief that the Construction PMI ended its recent downward trend in July and rose slightly from the 10-month low recorded in June. However, the data signal only a slight rise in total construction output that was solely driven by higher activity in residential building. With new business falling for a second month running and business optimism at an eight-month low, there is still a danger that the headline number may drift into contraction territory in coming months,” Oliver Kolodseike, economist at Markit, commented.