The state of Germany's construction sector has continued to significantly worsen in the beginning of the second quarter, driven by persistent demand weakness, as revealed by recent surveys from S&P Global.
The construction purchasing managers' index fell to 37.5 in April, a slight drop from 38.3 in March. This index is indicative of contraction whenever it falls below the score of 50.0. This marks a consistent decline in the sector since April of the previous year.
The steepest decline was noticed within the housing sector amongst the three main categories of construction. Commercial activity closely mirrored the decline witnessed in March, while civil engineering activity saw the most pronounced drop in four months.
New orders kept experiencing a more marked drop though the rate of decline has decelerated for the sixth consecutive month. The survey also highlighted that the construction sector was undergoing faster losses in terms of both employment and purchasing activity.
On the aspect of pricing, input prices witnessed a slight decrease in April. This was attributed to the reduced demand for building materials and products.
Looking ahead, German constructors demonstrated a predominantly pessimistic outlook, citing constrained public sector budgets and a potential slump in housing activity specifically.
