German construction industry ends four consecutive months of slowing growth in July

German construction industry growth continued into July, adding to the series of positive economic readings from the country. Data released earlier today showed that German construction purchasing managers’ index, produced by Markit, increased from 50.4 to 51.6.

Data follows strong readings for Germany’s services and manufacturing sectors released earlier this week. The improvements in June bring an end to four consecutive months of slowing growth in the country’s construction industry. That said, the outlook for the rest of the year still remains negative.

Growth was driven by increased housing construction, but there were declines in both civil engineering and commercial building output, with firms reporting the worst outlook for construction since last November.

"It’s a bit of a relief that the Construction PMI ended its recent downward trend in July and rose slightly from the 10-month low recorded in June. However, the data signal only a slight rise in total construction output that was solely driven by higher activity in residential building. With new business falling for a second month running and business optimism at an eight-month low, there is still a danger that the headline number may drift into contraction territory in coming months,” said Oliver Kolodseike, economist at Markit.