FX.co ★ German Construction Sector Remains Weak

The S&P Global Germany Construction PMI inched up to 42.4 in May 2026 from 42.1 in April, but remained firmly in contraction territory for the fifth consecutive month. The downturn was broad-based: housing activity recorded the steepest decline, followed by commercial construction, while civil engineering output fell for the first time in seven months. New orders continued to drop sharply, albeit at a slightly slower rate than in April, as firms reported fewer tender opportunities and a continued wait-and-see stance among clients. Supply conditions deteriorated further, with delivery times lengthening at the fastest rate since July 2022 amid logistics disruptions and material shortages. Employment fell for the fourth month in a row, accompanied by reduced use of subcontractors and lower purchasing activity. On the cost side, input price inflation remained close to April’s 47‑month high, driven by rising energy costs and higher prices for oil-based materials. Business sentiment stayed deeply pessimistic, with expectations still among the weakest seen in over a year.