German construction sector will likely contribute positively to economic growth in Q1

Markit Germany Construction PMI survey showed that the seasonally adjusted Purchasing Managers’ Index remaining above the no-change mark of 50.0. Despite falling from February’s recent high of 59.6 to 55.8 in March, the average reading over the first quarter as a whole (57.8) was the best in five years.

The rise in building output was broad-based, with growth reported across all three categories of construction activity covered by this survey. Construction firms in Germany reported optimism towards their 12-month outlook for activity, with the level of positive sentiment one of the highest in the survey’s history.

“Despite falling to a three-month low in March, the Germany Construction PMI signalled a sharp rise in building activity, thereby adding to hopes that the sector will contribute positively to economic growth in the opening quarter of the year," said Oliver Kolodseike, economist at Markit.