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04.02.202108:37:00UTC+00German Construction Sector Contracts Further In January

Germany's construction sector contracted further in January, survey results from IHS Markit showed Thursday.

The construction Purchasing Managers' Index fell to 46.6 in January from 47.1 in December. A score below 50 indicates contraction. The decline was led by a sustained downturn in work on commercial building projects. Meanwhile, supply chain pressures continued to increase, with January seeing longer lead times on building materials and products.

Commercial construction activity logged a sharp fall, while work on civil engineering dropped only moderately. On the other hand, residential construction work increased for the seventh straight month.

Citing general lack of demand and fewer opportunities to tender, inflows of new work increased in January. Employment increased fractionally for the first time since February last year.

On the price front, the rate of purchase price inflation faced by German constructors reached a 23-month high. Looking ahead, constructors remained downbeat about the prospects for activity in 12 months' time, citing concerns about the investment outlook.



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