Germany January construction PMI 43.3 vs 41.7 prior. That said, January’s S&P Global/CIPS survey offered some optimism.


That's a slight improvement to Germany's construction activity but demand conditions remain weak as high prices as rising rates weigh on sentiment. All three broad categories (residential, commercial, civil engineering) showed sustained downturns, so that continues to detail the underlying negativity in the sector to start the new year. S&P Global notes that:

“Germany's construction sector remained mired in contraction territory at the start of the new year, as demand for building work remained strained by soaring prices, tightening credit conditions and still-high levels of economic uncertainty. The rates of decline in activity and new orders eased somewhat in January, coinciding with reduced pessimism among businesses towards the outlook, but each of these indicators remained deep in sub-50 territory to suggest further weakness in the coming months.

"Falling workloads meant that construction companies remained in retrenchment mode, scaling back their purchasing activity as well as trimming workforce numbers. Issues over skill shortages in the sector meanwhile look to be easing, with data showing back-toback improvements in the availability of subcontractors.

"On the supply side, German constructors continued to note longer lead times on building materials, but with far less frequency than around this time last year. The rate of cost inflation in January was also well below the highs of the past two years, although a slight uptick suggested a pause in the recent slowing trend."

Source: pmi.spglobal.com