February 3, 2023

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Germany May construction PMI 44.5 vs 46.2 prior

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Latest data released by Markit – 4 June 2021

Severe disruptions to the supply chain is to blame for the more subdued construction activity in May, with 90% of constructors reporting longer lead-times on building materials.

Adding to that is cost pressures continuing to climb, reaching a record high and that is depressing business sentiment in the sector. Markit notes that:

“While manufacturing has long been showing strong
growth and services is starting to revive again, the
construction sector, by contrast, remains in the slow
lane, with its performance in May the weakest since the
snow disruption in February.

“Concerns among constructors have transitioned from
the pandemic’s impact on clients’ willingness and ability
to spend to now being dominated by worries about
material shortages and an associated spike in costs.
Supply disruptions threaten to constrain demand for
new building projects as well as current activity on site.

“The numbers of businesses reporting delays across
supply chains and rising costs are staggeringly high
compared to what’s been seen in the past two decades,
and the impact is being felt across the board, in activity,
new orders, employment and purchasing activity.”

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