The HCOB Germany Construction PMI rose to 44.8 in June 2025 from 44.4 in the previous month, indicating a slightly less severe downturn in the sector. This modest improvement was largely driven by a return to growth in civil engineering activity - the first expansion since August 2023. Additionally, the decline in commercial construction eased to its slowest pace in more than two years. However, the housing sector continued to struggle, with activity contracting sharply at the fastest rate in three months. New orders remained in decline during June, although the rate of contraction softened slightly compared to the previous month. On the cost front, input price inflation rose to its highest level in 28 months, and output charges also increased, despite a notable improvement in material availability. Finally, the optimism seen in May faded in June, turning into renewed pessimism - largely driven by the deepening downturn in the housing market.