Germany’s construction sector has been doing well for the past few years. Housing costs were doing very well. The country has experienced significant growth for a while now in the construction sector. However, this past Thursday, purchasing Manager’s index in the real estate sector began showing a decline.
In the month of August, the construction industry experienced a decline in purchasing managers index. It is now showing a further decline and it is thought to be heading into the negative zone. Between July and August, the index fell from 49 points all the way to 46 points. Any value below the 50-point mark indicated a declining performance.
Today, Germany’s federal statistical office released data that depicts turnover in July in the real estate sector. A closer look at the trend indicates that the Purchasing Manager’s Index has taken a turn for the worse. In the month of June, real estate sells went down by 3.3 percent year on year.
However, as bad as the Purchasing Manager’s index may seem in the month of August, it is not yet clear whether the result will be the same in the next few months. One thing is clear though; the construction boon is finished, at least for now.
At a glance, the data seems to say that the construction sector, and sib sectors, are in the red zone than is usually the case when the sector is not performing as expected. Construction of structure has gone down 4.3percent while roofing construction indicates a negative 4.2 percent.
On the other hand, it is clear, for instance, that a 2.6 percent rise in the construction of underground pipelines and wastewater treatment plants. If you compared longer periods, like January to June of 2019, versus the same period in 2018, it appears total revenue in the real estate sector in within the plus zone, with an 8.3 percent growth. Therefore, this development is in the initial stages.