German construction PMI falls to a 10-month low in June

Latest survey data by Markit showed that seasonally adjusted Purchasing Managers’ Index fell from May’s 52.7 to 50.4 in June, signalling a further slowing in the rate of output growth at German building firms. Despite rise in construction activity for the seventeenth consecutive month, expansion was only marginal overall. PMI is now close to a level that is normally consistent with a stagnation of construction output.

Commercial activity fell during the month, thereby ending a 16th consecutive month of growth. Residential building output rose for the twenty-first month running in June. But the rate of increase slowed further from February’s record-high.

The rate of job creation accelerated since May, but was moderate overall. Companies extended hiring during the month despite slower growth of activity and stagnation in new business. Inflationary pressures also continued to build and average lead times for construction materials rose further during June.

"The recovery in Germany’s construction sector appears to be losing its legs at the end of the second quarter,” said Oliver Kolodseike, economist at Markit.