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Economic Buzz: German construction sector stays in deep contraction
04-Jun-2026 17:06
Germany's construction sector continued to witness a sharp contraction in May. New orders continued to decline at a sharp rate, albeit slightly better than in April. Construction PMI came in at 42.4 compared to previous reading of 42.1 and stayed in deep contraction zone. Panellists indicated strong headwinds to demand from heightened levels of uncertainty and elevated price pressures. As for inflation pressures, the rate at which input prices rose held close to April's 47-month high. That was driven by a continued increase in the cost of energy and oil-based products. Firms also faced worsening supply delays in May as average lead times on building materials and products lengthened to the greatest extent since July 2022 amid reports of logistics issues and supply shortages. While there is some improvement in housing and commercial activity on the month, they remain at subdued levels.

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