Germany’s construction sector activity grew at the weakest pace in five months in June as new orders declined, survey data from Markit Economics showed Monday.
The seasonally adjusted Purchasing Managers’ Index, or PMI, for the construction sector, declined to 50.7 in June from 50.8 in the previous month. Any reading above 50 indicates expansion in the sector.
Civil engineering building projects contracted at a slower pace in June when compared to the previous month.
In contrast, residential building projects rose for the ninth straight month in June, although the pace of growth was little change from last month. Commercial activity also increased further in June, though the pace of expansion slowed from the previous month and was the least marked in the five months.
New orders declined for the first time in four months in June as lack of new incoming work ended a five-month period of rising buying activity, although the rate of orders growth was only fractional overall.
Employment level in the construction sector fell for the first time this year in June with the rate of job shedding modest.
On the price front, input prices increased further in June on higher costs for certain materials, with the rate of inflation little-changed since last month.
German constructors’ optimism towards the one-year outlook for activity fell to a five-month low in June, with the companies expecting construction activity to rise over the coming year citing new order growth forecast and a general positive trend, Markit said.
“The recovery in Germany’s building sector could be put at risk if new order volumes remain depressed and activity growth slows even further,” said Oliver Kolodseike, economist at Markit.
The material has been provided by InstaForex Company – www.instaforex.com