FX.co ★ Germany's Construction Sector Stays Deep in Contraction

The HCOB Germany Construction PMI continued its downward trajectory, dropping to 40.3 in March 2025 from 41.2 in February. This decline marks a definitive end to the first quarter with the construction sector deeply entrenched in contraction. The pace of activity reduction has accelerated marginally, hindered by a shortage of new projects. Construction firms are maintaining a conservative approach by scaling back on both hiring and purchasing activities. However, it's noteworthy that these declines are occurring at a slower pace than observed in the previous month. Contributing to a cautiously optimistic outlook, firms have expressed their least pessimistic view on future activities in over three years. Concurrently, purchase prices have risen slightly, marking only the second increase within the year. Furthermore, construction companies have reported higher rates charged by subcontractors. The residential sector continues to lead this downturn, experiencing the most rapid overall decline.