Germany’s construction activity decreased at the sharpest rate in seven years in March with declines in all sub-groups as firms cut jobs amid weaker demand due to the coronavirus outbreak, survey data from IHS Markit showed on Monday.
The Construction Purchasing Managers’ Index, or PMI, fell to 42 from a 25-month high of 55.8 in February. A reading below 50 suggests contraction in activity.
The construction sector shrunk for the first time in seven months.
Housing activity logged its worst decline since March 2013, while commercial activity fell the most in over eight years. The deepest downturn in activity was witnessed in civil engineering that recorded its sharpest decline since early-2010.
New work declined at the steepest rate since February 2010. Construction employment fell most since December 2010, thus ending a survey-record sequence of continuous job creation stretching back to mid-2015.
Business expectations decreased the most in the survey’s 20-plus-year history, to hit its lowest since late-2008, following the collapse of Lehman Brothers.
Input price inflation remained solid, albeit slowing to a three-month low.
“The near 14-point fall in the headline Construction PMI in March is somewhat comparable to those seen previously during times of inaccessible conditions on site during very heavy snowfall, in late-2010 and early-2012 for example, which gives some context as to the severity of the collapse in building activity brought on by the COVID-19 outbreak,” IHS Markit Principal Economist Phil Smith said.
“The difference now is that constructors aren’t expecting a swift recovery – business confidence towards future activity has shown an unprecedented collapse and firms have begun cutting staffing numbers for the first time in almost five years.”
The material has been provided by InstaForex Company – www.instaforex.com