04.04.202509:19:00UTC+00German Construction Downturn Deepens In March

Germany's construction sector deteriorated at a faster pace at the end of the first quarter amid weaker order inflows, survey results from S&P Global showed on Friday.

The HCOB construction Purchasing Managers' Index registered 40.3 in March, down from 41.2 in February. Any score below 50 indicates contraction in the sector.

Among the three broad categories, the residential sector continued to exhibit the fastest overall rate of decline. Both commercial and civil engineering activity logged the worst performance in three months.

Weaker demand conditions in March were due to slow decision-making among customers, high prices and financing costs, and weakness in the domestic manufacturing sector. Although eased to a 5-month low, the rate of decline in new orders remained sharp.

Constrictors reduced their workforce strength in March, though the pace of job shedding moderated sharply to its weakest since April 2023. Similarly, purchasing activity declined at the slowest pace in nearly two years.

Reduced demand for building materials and products eased the strain on suppliers and accelerated purchase delivery times, the survey said.

On the price front, input costs increased somewhat, but the rate of inflation was considerably slower than the average recorded over the series history.

The survey revealed a further improvement in firms' activity expectations, which were the least pessimistic for more than three years, driven by plans for a boost in infrastructure spending.