German construction activity grows strongly in December

German construction activity expanded at the most rapid pace in four months in December, driven by robust growth in commercial building work. The headline seasonally adjusted PMI rose to 53.7 in December from November’s 53.1. The latest figure was just below the average for 2017 of 54.3. Commercial activity mainly drove growth in December, growing at the fastest rate in four months. The level of work on residential building projects also rose moderately. Civil engineering activity, meanwhile, dropped for the second straight month, although modestly.

New orders returned to growth in December, following its drop in November. Anecdotal evidence showed that wider economic growth underpinned demand for new projects. But the degree of the rise in orders books was just marginal, and much softer than those seen in the summer, attributed partially to ongoing capacity constraints. Companies’ sentiment towards future performance rebounded in December. The extent of positivity was the highest since July, although below the trend level for the year as a whole.

December witnessed additional strong rises in both employment and the quantity of purchases made by constructors. But paces of growth lost additional momentum in both cases, falling to lowest for six and eight months respectively.

At 14:00 GMT the FxWirePro's Hourly Strength Index of Euro was neutral at -6.80745, while the FxWirePro's Hourly Strength Index of US Dollar was bearish at -82.6398. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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