German Construction Activity Contracts At Slower Pace

(RTTNews) - Germany's construction sector continued to contract in November but the pace of decline softened due to the rise in civil engineering activity, survey data from S&P Global showed on Thursday.

The HCOB construction Purchasing Managers' Index registered 45.2 in November, down from October's seven-month low of 42.8. A score below 50.0 indicates contraction in the sector.

The increase was primarily driven by renewed upturn in civil engineering activity. However, there were sustained downturns in housing and commercial activity. Residential activity remained the weakest-performing segment by some margin.

Constructors reported another faster decline in incoming new work. With workloads falling, constructors maintained a negative outlook for activity in the coming year. Expectations fell to its lowest in three months.

There was a slight rise in employment despite scepticism in the outlook. It marked the end of a continuous sequence of job shedding stretching back to April 2022.

Weak demand for building materials and products helped constrain the rate of purchasing price inflation. Subcontractor charges increased at a slightly slower pace than the month before.

Supplier delivery times lengthened for the second straight month and for only the third time in the past 21 months. The deterioration in vendor performance was the greatest seen since February 2024.

"The recession in the construction sector eased somewhat in November," Hamburg Commercial Bank Chief Economist Cyrus de la Rubia said.

"The slump in the broader construction sector can only be overcome if the economy as a whole returns to sustainable growth, improving the purchasing power of consumers and businesses alike," de la Rubia added.