German construction sector activity deteriorated for the third successive month in June, as demand for building was dampened amid the woes of heightened economic uncertainty, rising building costs and higher interest rates, survey results from S&P Global showed.
The construction purchasing managers' index was up slightly from a nine-month low of 45.4 in May, to 45.9 in June. However, any reading below 50 suggests contraction in the sector.
Among the three monitored categories, civil engineering activity recorded the sharpest rate of decline in June, closely followed by commercial activity. Residential projects work decreased to a lesser extent during the month.
New orders fell for the fourth straight month in June, linked to growing hesitancy amongst customers due to unfavourable economic conditions, the high cost of building work and rising interest rates.
In June, purchases by construction agents were delayed as a result of material shortages. Both employment and sub-contractor work fell for the third consecutive month. Input price inflation remained above its historical series average in June despite easing to a five-month low.
Amid concerns about supply chain issues and high inflation, German construction firms remain pessimistic about output expectations in the next year.
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