German Construction Continues to Contract in September

Source: IHS Markit

German construction continued to post a contraction in September, albeit posting an improvement from the previous month.

• The IHS Markit Germany Construction Purchasing Managers’ Index stood at 47.1 in September, up from 44.6 in August. This remains lower than the 50.0 threshold that separates expansion from contraction.
• Civil engineering posted the biggest decline, as the decline in commercial activity fell by the weakest since March as residential projects inched closer to stabilization.
• New orders in the construction remained subdued, as firms reported issues on new work due to a hike in prices and capacity constraints.
• Firms reported higher prices for building materials and products during the month, specifically in insulation, steel, and timber, as levels remained higher than historical standards.
• Material shortages weighed on purchasing activity, as buying levels declined in the past five months, even as the decline showed little change from the previous survey period.