German Construction Sector Contraction Deepens

(RTTNews) - Germany's construction sector registered its steepest decline in seven months in October, survey data from S&P Global showed on Thursday.

The construction Purchasing Managers' Index slid unexpectedly to 42.8 in October from 46.2 in the previous month. The index was forecast to rise to 46.9.

The reading was the lowest since March and the level below 50 indicates contraction in the sector.

Among the three broad categories of construction, housing activity was the weakest performer as the rate of contraction was the fastest seen so far this year.

Work on commercial projects also declined at a faster pace. Civil engineering returned to contraction after rising in the previous two months.

"This is a heavy blow for the construction sector, which was already under pressure," Hamburg Commercial Bank Chief Economist Cyrus de la Rubia said.

"Overall, the numbers reflect a climate of uncertainty, high building costs, and relatively high long-term interest rates, which have hovered well above the levels of the previous decade for the past two years," the economist added.