German construction activity growth momentum slows in November

The upturn in Germany’s construction indicated signs of losing momentum in November, as growth in the total industry activity slowed to a ten-month low amidst first drop in new orders for over a year. The headline seasonally adjusted PMI index for construction dropped to 53.1 in November from October’s 53.3.

The month recorded strong rises in housing and commercial construction activity, with the former showing a more rapid rate of growth than the month before. Meanwhile, civil engineering activity dropped for the first time in 12 months, falling at the sharpest pace since August 2015 and being a drag on the overall industry performance.

The level of new orders taken on by constructors dropped a bit and for the first time in more than a year in November. Anecdotal evidence indicates towards a decline in tenders from the recently high levels, but also found instances where full utilization of resources had prevented building firms from accepting new orders.

Meanwhile, the survey’s indicator of future expectations dropped to its level since November 2016, hinting at just modest optimism compared with the peaks seen in the first half of the year. Employment continued to rise mid-way through the fourth quarter as constructors looked to increase capacity. The rate of job creation was solid, but eased more from September’s recent peak. The use of sub-contractors also rose more slowly than in recent months.

Constructors in Germany faced another sharp rise in average prices paid for raw materials and construction products, in spite of the rate of cost inflation weakening to a four-month low.

At 16:00 GMT the FxWirePro's Hourly Strength Index of Euro was highly bearish at -115.643, while the FxWirePro's Hourly Strength Index of US Dollar was neutral at 44.0836. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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