Financial News: German Building Permits Post Sharp Decline In May

German Building Permits Post Sharp Decline In May

07/18/2024 - 09:12:00 (RTTNews)

(RTTNews) - Germany's building permits posted another sharp decline in May, reflecting the ongoing weakness in the construction sector, data from Destatis showed on Thursday.

The number of permits for construction of apartments shrank 24.2 percent in May from the last year, which was worse than the 17.0 percent decrease posted in April.

Compared to May 2022, the number of building permits even fell by 43.9 percent or 13,900 apartments.

For January to May period, 89,000 apartments were approved, down by 21.5 percent or 24,400 apartments from the same period last year.

Destatis said the number of building permits for single-family homes plunged 31.5 percent and that for two-family homes were down 15.7 percent.

The number of approved apartments also fell significantly in the largest building type, multi-family homes, by 21.7 percent, data showed.

Early this month, the HCOB Purchasing Managers' survey compiled by S&P Global revealed that tentative signs of the downturn in Germany's construction sector eased in June. The construction PMI rose to 39.7 from 38.5 in May.

The score was the highest since August 2023 but remained firmly below the 50.0 threshold.

HCOB chief economist Cyrus de la Rubia said construction activity continued to decline significantly in June, in line with the trend since spring 2022 but the pace of the downturn is slowing somewhat.

"It appears that the cautious turnaround in interest rates is also beginning to make itself felt in the construction industry," de la Rubia said.

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