FX.co ★ German Construction Downturn Slightly Deeper in May

In May 2025, the HCOB Germany Construction PMI decreased to 44.4, down from 45.1 in April, indicating a slightly accelerated contraction within the sector. Both housing and commercial activities experienced more pronounced declines, whereas civil engineering showed signs of stabilization, concluding a 20-month period of downturn. New orders saw a marginally faster reduction, influenced by ongoing uncertainty and elevated prices. Employment within the sector continued to be strained, with job cuts accelerating to a rate not seen since February and a renewed decrease in the use of subcontractors. While purchasing activity continued to fall, it did so at the slowest pace observed in nearly three years. Supplier delivery times improved for the fourth month in a row. Regarding prices, input cost inflation increased for the third consecutive month, reaching its highest point in 27 months, though it remained below historical averages. Positively, business sentiment became optimistic for the first time since early 2022, driven by expectations of heightened infrastructure investment.