Germany’s construction sector continued to contract in September with supply bottlenecks, capacity constraints and strong price pressures acting as headwinds to activity and new orders, survey data from IHS Markit showed on Wednesday.
The construction Purchasing Managers’ Index rose to 47.1 in September from 44.6 in August. However, a reading below 50.0 indicates expansion.
The weakest-performing area of construction activity in September was civil engineering. By contrast, the downturn in commercial activity eased noticeably to the weakest since March, while work on residential projects moved closer to stabilization.
Inflows of new orders in the construction sector remained subdued in September.
Employment rose for the first time eight months, while the rate of input cost inflation retreated to a six-month low amid fewer reports of supply delays.
There was further strong upward pressure on rates charged by sub-contractors, which rose to the greatest extent in the series history since 1999.
Looking ahead, German constructors on balance maintained a slightly negative outlook for activity over the coming year.