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Germany's Construction Sector Continues To Contract In June

Germany's construction sector continued to contract in June led by ongoing weakness in new orders linked in part to the coronavirus, or Covid-19 pandemic, survey data from IHS Markit showed Monday.

The construction Purchasing Managers' Index rose to 41.3 in June from 40.1 in May.

However, a score below 50 suggested that construction activity was still firmly in contraction territory.

Activity has now fallen in each month since March. There were steep declines in work on both commercial and civil engineering projects. By contrast, housing activity showed greater signs of stabilizing.

New orders decreased for the second straight month. Given the decrease in workloads, constructors maintained a preference for lower payroll numbers.

Further, constructors remained downbeat about the year-ahead outlook for activity. That said, sentiment improved from a near-record low in March.

June's survey showed historically low cost pressures across the construction sector. Input price inflation dipped for the fourth month running to the weakest since August 2009. Rates charged by sub-contractors also barely rose in June.

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