German Construction Sector Contracts Sharply In February

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Germany’s construction activity contracted sharply in February as severe bad weather caused widespread disruption to work on sites, survey results from IHS Markit showed on Thursday.

The construction Purchasing Managers’ Index fell to 41.0 from 46.6 in January. A score below 50 indicates contraction. Moreover, this was the lowest score since last May.

The impact was seen across all broad categories of construction. Housing activity dropped notably, ending a seven-month sequence of growth. At the same time, work on commercial building projects contracted at the quickest rate since last September.

The worst performance was seen in civil engineering activity, which recorded a sharp and accelerated contraction that was the fastest since June last year and among the steepest on record, the survey showed.

Bad weather is transitory, but constructors are expecting the effects of the pandemic on client budgets and spending to be more long-lasting, Phil Smith, an associate director at IHS Markit, said.

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