German construction grows at fastest pace in six months in September

Germany’s construction sector expanded at the fastest rate in six months in September, data released on Tuesday showed.

The Markit construction purchasing managers’ index (PMI) rose from 50.3 in August to 52.4 last month, marking the strongest increase in construction output since March, as building activity in the Eurozone’s largest economy rose for the eight consecutive month.

According to the survey, the residential building sector was the standout performer of the construction industry in September, with housing activity increasing at the fastest pace since April.

However, construction companies reported sluggish commercial activity, although the segment registered growth for the eight consecutive month.

Meanwhile, having fallen since April, civil engineering activity contracted again in September, although the pace of decline slowed considerably from the previous month.

German constructors raised their purchasing activity during the month at the fastest pace since March, while employment rose for the third successive months, with the rate of job creation the most marked since April.

“After growth of construction output had slowed to a crawl in recent months, September’s PMI data present some positive news for Germany’s building sector,” said Markit’s economist Oliver Kolodseike.

“Output rose at the strongest rate in six months, largely a result of sustained growth in residential building activity.

“Encouragingly, firms also reported a pick-up in purchasing activity, suggesting that companies are likely to remain busy in coming months.”

Markit added the companies surveyed reported a downbeat feeling over the 12-month outlook for activity, although the degree of negative sentiment was considerably less severe than in August.