FX.co ★ German Construction Downturn Softest Since 2023

In July 2025, Germany's HCOB Construction PMI showed an uptick to 46.3, up from 44.8 in June. This marks the least severe downturn in the sector since February 2023. The primary contributor to this improvement was a resurgence in commercial construction, marking its first growth since April 2022, while the decline in housing activity slowed to its lowest in three months. However, civil engineering saw a return to contraction. There was a notable decline in new orders, with companies attributing this to high costs and sluggish client demand, resulting in the swiftest reduction in purchasing since March and ongoing job cuts—albeit with a slowdown to a four-month low. Though input costs rose for the fifth consecutive month, the increase was less pronounced than in June. Subcontractor fees rose amid better availability, and supplier delivery times improved again, reflecting weak demand. Business confidence, while still slightly negative, showed an improvement over the previous month; firms remained particularly cautious regarding the prospects for housing and the broader economic landscape.