German construction industry grows in July

The crisis-stricken German construction industry has seen an upturn in business at the start of the second half of the year.

In July, order intake in the main construction sector grew by 1.9% compared to the previous month, Germany's Federal Statistical Office announced in Wiesbaden on Thursday. The increase was 8.7% compared to the same month last year.

Order intake in building construction, which is largely dependent on residential construction, rose by almost 11%, while civil engineering, which includes road and bridge construction, saw an increase of 6.7%.

At the same time, the main construction sector, which employs more than 900,000 people, recorded rising sales. In July, price-adjusted revenue was 1.4% higher than in the same month last year, while employment increased slightly.

Over the first seven months of the year, sales grew by 2.1% compared with the same period last year.

"We are pleased to see a stabilization in residential construction orders over the course of the year," said Felix Pakleppa from the Central Association of the German Construction Industry (ZDB). However, he said the situation in road construction remains difficult, and the signals in commercial construction are mixed.

The construction industry has had a tough few years. With the war in Ukraine causing both material prices and interest rates to rise, residential construction in particular collapsed as many people could no longer afford their own homes.

Now, with key interest rates falling and the federal government spending billions on infrastructure, the construction industry is hoping for a tailwind.