The German construction sector ended the first quarter on a strong footing, seeing the steepest rise in activity for 14 months as well as an acceleration in the rate of job creation.
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New orders meanwhile rose for the seventh straight month, with companies becoming more optimistic towards the outlook.
On the supply side, higher demand for building materials and products contributed to a marked increase in input lead times and a further rise in purchase prices.
The headline seasonally adjusted Germany Construction Purchasing Managers’ Index® (PMI®) – a measure of monthon-month changes in total industry activity – recorded a reading of 55.6 in March.
This was up from 54.7 in February and indicated the strongest growth in total construction activity since January 2018.
The main impetus behind the upturn in activity continued to come from the residential and commercial sectors.
Both showed the steepest increases in activity for 14 months.
Work on civil engineering projects also increased in March, rising for the third month in a row, although the rate of expansion eased from that seen in the previous survey period.
Adding to the picture, latest data showed a further rise in new orders at German constructors amid reports of greater tender opportunities.
The rate of new order growth slowed from February's 13-month high, though was still solid overall.
The healthy order book situation was reflected in positive expectations towards future activity, with March's survey showing the highest degree of optimism since April last year.
With both current workloads and business confidence continuing to rise, there was an increased appetite for new hires across the German construction sector in March.
The rate of employment growth accelerated for the second month in a row to the quickest since January 2018.
There was also a further rise in sub-contractor usage during the month, though a lack of availability remained a feature.
Elsewhere, March saw a marked and accelerated increase in the amount of building materials and products purchased by Germany's construction companies.
The rise in buying activity was the steepest seen since June last year and in turn led to renewed strain on supply chains.
Lead times on inputs lengthened to the greatest extent for four months in March, with over one-in-five firms reporting delays.
Average prices paid for purchases increased in March.
As well as higher demand, anecdotal evidence also highlighted the influence of increased transport costs and wage pressures.
Though remaining sharp by historical standards, the rate of inflation eased to a ten-month low.
There was a similar picture for sub-contractor rates, which rose at a slower rate, but one that was still sharp overall. ■