Shares listed in Germany staged a recovery on the final trading day of the week as the latest data showed an improvement in the country's construction sector. At closing on Friday, the blue-chip DAX index gained 0.55%, ending its losing streak at four days. S&P Global-compiled results of the latest HCOB PMI data showed that the slowdown in the German construction industry eased in September, while input costs continued to decline.
The HCOB Germany Construction PMI Total Activity Index rose to a 16-month high of 41.7 in September from 38.9 in August. "The construction sector is starting to show some faint signs of life again, but we should not get carried away. The headline index rose in September to its highest level since May of last year.
That said, the sector is still shrinking - just not as quickly as it has been over the previous 15 months. The uptick is largely due to impulses from residential and commercial construction, while civil engineering has taken a bigger hit compared to the previous month. Overall, things still look pretty bleak in the construction sector," commented Hamburg Commercial Bank Chief Economist Cyrus de la Rubia. A similar scenario was observed in the wider eurozone as the HCOB Eurozone Construction PMI Total Activity Index remained in contraction despite rising to 42.9 from 41.4 in August.
It marked 29 months of persistent decline in construction activity. "There's no room for optimism right now. Order intakes are shrinking alarmingly, and purchasing volumes are in the doldrums. It's hardly surprising that the outlook for future activity remains pessimistic. Consequently, French construction firms are increasingly laying off staff.
A monetary policy boost from the ECB would be more than welcome to revive the construction sector, but the ECB's recent communications hardly seem to lift spirits in the industry," said Hamburg Commercial Bank economist Tariq Kamal Chaudhry. On the corporate front, Daimler Truck's North American arm agreed to terminate its deal with Norwegian composite pressure cylinder and fuel system manufacturer Hexagon Purus for the supply of battery electric vocational vehicles.
Daimler Truck North America will reimburse its counterparty for certain costs associated with the deal amid the cancellation. At closing, the German commercial vehicle manufacturer rose 1.33%..