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Germany Construction Sector Shrinks First Time In 7 Months

(RTTNews) - German construction activity declined for the first time since March during October, survey data from IHS Markit showed on Wednesday.

The construction Purchasing Managers' Index fell to 49.8 from 50.2 in September. A score below 50 suggests contraction in the sector.

"Though only marginal, October's decrease in activity was notable in the fact that, unlike the last two falls in January 2015 and March this year, it wasn't associated with a bout of severe bad weather," IHS Markit economist Phil Smith said.

"The most positive takeaway from the survey was another steady increase in new orders, which should at least support activity levels in the short term."

Housing activity was the worst performing area of construction in October.

The latest decline was the third such in over four years and reflected reductions in work on both housing and commercial building projects.

Meanwhile, new orders grew the most in five months, but the rate of expansion remained subdued.

Employment growth in the construction sector slowed to a 29-month low and purchasing activity fell the most in four years.

Average input prices rose sharply at the fastest pace in 12 months and among the quickest seen over the past seven-and-a-half years. Higher oil prices and new road toll chargers were to blame.

Constructors' confidence weakened as they were worried about the slowing manufacturing sector.
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