German Construction Slump Eases in June

The S&P Global Germany Construction PMI rose to 44.8 in June 2026 from 42.4 in May, signaling the slowest contraction in construction activity in three months. The downturn persisted across all major segments, with housing remaining the weakest performer, while declines in commercial and civil engineering activity eased. New orders continued to fall but at the slowest pace of the year, as high prices and subdued demand continued to weigh on client spending. Employment declined for a fifth consecutive month, although job cuts and purchasing activity both eased to three-month lows. Supply conditions remained challenging, with elevated input cost inflation and longer delivery times linked to the Middle East conflict and product shortages, though reports of delays eased to the lowest level in three months. Business confidence improved for a second straight month but remained negative, as firms continued to cite high costs, tight customer budgets, and weak market confidence.

The S&P Global Germany Construction PMI edged up to 42.4 in May 2026 from 42.1 in April, remaining in contraction territory for a fifth straight month. The downturn was broad-based, with housing activity falling the most, followed by commercial construction, while civil engineering output declined for the first time in seven months. New orders continued to fall sharply, though at a slightly slower pace than in April, as firms cited reduced tender opportunities and a wait-and-see approach from customers. Supply conditions worsened further, with delivery times lengthening at the fastest pace since July 2022 due to logistics disruptions and shortages. Employment declined for a fourth consecutive month, alongside reduced subcontractor use and lower purchasing activity. On prices, input cost inflation stayed close to April’s 47-month high, driven by higher energy and oil-based material prices. Sentiment remained deeply pessimistic, with expectations still among the weakest in over a year.

The S&P Global Germany Construction PMI plunged to 42.1 in April 2026, a sharp drop from 48.0 in March and the lowest level since March 2025. The steep decline in total activity at the start of Q2 was driven by the housing sector, where residential project work fell at the fastest pace in over a year. Commercial activity also suffered its steepest contraction in 17 months, while civil engineering activity remained virtually flat after five consecutive months of growth. New orders fell at the fastest rate in more than a year, and job cuts accelerated to their quickest pace since May 2025, with firms blaming customer hesitancy, weak economic conditions, and persistent price pressures. Input cost inflation reached its highest since May 2022, and supplier delivery times lengthened the most since July 2022, largely due to disruptions from the Middle East war.