German construction sector continues to grow strongly in April 2017

Germany’s construction sector continued to grow solidly in April 2017. The headline construction PMI on a seasonally adjusted basis dropped to 54.6 from March’s 56.4, remaining well above 50. This was above the average for the first quarter and the trend level seen in the last four years. All the three areas of construction recorded solid growth in activity. The commercial category saw the most rapid pace of growth, followed by civil engineering and residential.

The volume of new work received by Germany’s construction companies grew for the sixth straight month in April. The pace of growth slowed from March; however, it was still one of the most solid seen since the survey began in September 1999. The survey-record sequence of job creation in the construction sector continued in April, noted Markit. The pace of workforce growth alleviated from March’s 13-month high, but remain sharp nonetheless.

With workloads continuing to increase sharply in April, construction firms rose their purchases of inputs. The pace of growth stayed solid in spite of decelerating one month earlier. Suppliers’ delivery times lengthened to the greatest extent since January 2007. German construction firms rose their usage of sub-contractors for the nineteenth time in the last 20 months in April. Furthermore, the pace of growth was the most solid since March 2016.

Cost pressures in the German construction sector stayed solid in April. Input price inflation slowed from March’s five-year high; however, it stayed historically sharp. In the meantime, sub-contractors rose their rates at the most rapid rate since May 2008. The 12-month outlook for construction activity in Germany stayed firmly positive in April. Confidence weakened from March’s survey-record high; however, it was amongst the sharpest registered in the survey history, stated Markit.