German Construction Sentiment Improves for Second Straight Month in July

Sentiment in Germany's construction sector improved for the second consecutive month in July, with both current assessments and future expectations becoming less negative, according to a Jefferies analysis of the Ifo business climate index.

Index Shows Continued Gains

The Ifo business climate index for German construction rose again in July, marking two straight months of improved sentiment. The report noted that both components of the index—the assessment of the current business situation and expectations for the future—saw a reduction in pessimism compared to prior months.

Despite the recent gains, Jefferies highlighted that overall conditions in the sector remain below levels seen before the Iran conflict, as cited in the analysis.

Order Books and Material Costs

Ad

The improving sentiment is supported by recent data on order books, which grew in the mid-single digits on a monthly basis in May. Compared to the same period last year, order books were up 3.5% in May.

However, input costs continue to rise. Price data from June indicated notable monthly increases for specific materials:

• Adhesives: +1.6%
• Mortars: +1.4%

On an annual basis, cement and insulation materials recorded the smallest price increases among the construction materials tracked in the report.