Germany March construction PMI 42.9 vs 48.6 prior | Forexlive

• Prior 48.6

The headline reading is a 3-month low as total activity falls at its quickest pace so far this year. New orders also declined at a faster pace although the bright spot is that input costs rose at slowest rate
since October 2020. S&P Global notes that:

“March’s PMI data showed a setback for the German
construction sector, with activity and new orders both
falling at accelerated rates and business confidence
ticking down.

“The steeper decline in activity in March was perhaps
payback from the slowing rates of contraction seen
during the opening two months of the year, when
unusually mild weather had boosted activity to a degree.
That being said, the underlying trend has moved in the
right direction, with the headline PMI averaging 45.0 in
the first quarter from a low of 42.3 in Q4 last year.

“At a sector level, residential activity in particular
remains under pressure, as a combination of rising
interest rates, economic uncertainty and a squeeze on
real incomes weighs on the housing market.

“There were some encouraging developments elsewhere
in the data, however, including the most marked
improvement in lead times on building materials for
13 years, which pointed to rapidly easing supply-chain
bottlenecks and the cooling of price pressures. Input
cost inflation has come off the boil, while improving
subcontractor availability also means less upward
pressure on labour rates.”