German residential construction sector sentiment at three-year high
Sentiment in Germany's residential construction sector rose considerably in September, according to a business climate index published by the Munich-based ifo economic research institute on Monday.
Ifo put the index for the sector at minus 21.8, up 4.6 on the month and at its highest point since August 2022, despite its low level.
Construction companies assessed both their current situation and their outlook as less negative than in August.
"Residential construction is easing a bit," ifo analyst Klaus Wohlrabe said. "We cannot talk of a real trend change, but the low seems to have been passed," he added.
With the exception of a brief decline during the pandemic, the index was constantly in positive territory over the years 2016 to 2021, before falling at the start of the war in Ukraine in February 2022.
Over the past 18 months, the index has slowly recovered after being 30 lower at the start of 2024.
The proportion of companies pointing to a shortage of orders rose to 46.7% from 45.7%. Cancellations also remained at a high level.
"The rise in the number of construction permits issued is not showing up yet in order books," Wohlrabe said.