Germany January construction PMI 43.3 vs 41.7 prior | Forexlive

• Prior 41.7

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.”