Financial News: German Construction Sector Downturn Deepens

German Construction Sector Downturn Deepens

11/07/2024 - 06:26:00 (RTTNews)

(RTTNews) - Germany's construction sector downturn deepened in October with faster decreases in activity and new orders, purchasing managers' survey data from S&P Global showed Thursday.

The HCOB construction Purchasing Managers' Index fell to 40.2 in October from a 16-month high of 41.7 in September. A score below 50.0 indicates contraction.

All three broad categories of construction recorded faster decreases in activity in October. Housing activity once gain posted the steepest rate of contraction, followed by the commercial segment.

Meanwhile, the decline in civil engineering accelerated most notably, with the sector registering its worst performances in three months.

New orders fell at a slightly faster pace as the weakness in the broader economy and high interest rates weighed on demand for new construction projects.

Building companies remained in retrenchment mode and there was a marked decline in employment.

On the price front, the survey showed that average prices paid for purchases gathered pace. Input costs fell for the seventh straight month and at the quickest pace since last October.

Although sentiment improved slightly since September, it was still the second-weakest in the year-to-date period.

Hamburg Commercial Bank Junior Economist Jonas Feldhusen said the persistently weak economic conditions and political uncertainty in the country continue to suppress demand within the sector.

"A comprehensive fiscal stimulus program would certainly benefit the industry," Feldhusen added. However, the economist said a robust program capable of providing investment security is unlikely to be forthcoming from the current government.

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