German Construction Downturn Deepens

The S&P Global Germany Construction PMI fell to 42.1 in July 2026 from 44.8 in June, signaling a sharper contraction in construction activity and the weakest reading in three months. The index remained below the 50 threshold for the seventh consecutive month, highlighting the sector's prolonged downturn. Housing remained the weakest-performing segment, with activity falling at the fastest pace in three months, while commercial building activity also declined at a faster pace. By contrast, civil engineering returned to growth for the first time in three months. New orders continued to fall as high prices and delayed customer decision-making weighed on demand. Employment declined for a sixth consecutive month, while purchasing activity also weakened. Meanwhile, input cost inflation eased to a five-month low and supplier delivery delays moderated for a second straight month. Business confidence remained negative and edged lower.

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.