In May this year, Markit's seasonally adjusted
Germany Construction Purchasing Managers' Index (PMI) saw its second consecutive month of decline in activity, falling from April's 49.7 points to 48.1 points, constituting the sharpest month-on-month decrease rate since March last year.
In May, the decline in
Germany's
construction activity was due to several reasons. One was the drop in the civil engineering work and residential
construction activity, despite the increase in commercial
construction, all compared to April. Meanwhile, new orders declined further in May, extending the current sequence of contraction to 26 months. With demand weakening, German constructors lowered their purchasing activity further in the given month. On the other hand, input costs continued to increase during May, with one in five participants signaling higher cost burdens. However, the rate of cost inflation eased slightly since the previous months and was the weakest since the beginning of the year.