The outlook for the German economy darkened again yesterday after a ‘perilous plunge’ in construction and a hit to industry.
S&P Global said its index of building activity in Europe’s largest economy – where scores below 50 show decline – fell to a three-and-a-half year low of 36.2 last month.
‘Germany’s construction sector remained deep in recession,’ the report said.
Separately, official figures showed industrial orders suffered an unexpected 3.7 per cent decline in October, confounding predictions of a 0.2 per cent rise.
The double-whammy is the latest setback for an economy that was for many years the driving force of Europe and the eurozone but is the worst performing in the G7.
Construction slump: S&P Global said its index of building activity in the German economy – where scores below 50 show decline – fell to a three-and-a-half year low of 36.2 last month
Total output across the economy fell by 0.1 per cent in the third quarter of the year and looks set to decline again in the fourth quarter – leaving the country in recession.
Ralph Solveen, economist at Commerzbank, said: ‘The German economy will continue to shrink in the winter months.’
Cyrus de la Rubia, chief economist at Hamburg Commercial Bank, warned of little respite for the German construction.
‘The building sector in Germany is experiencing a perilous plunge, with commercial building activity and civil engineering witnessing an escalated fall in November,’ he said.
‘The housing segment, leading the descent with a rapid decline, persists in cutting construction activity at a relentlessly depressive pace. A recovery remains elusive.’
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