German construction sector sees 2 pct growth despite bad weather
BERLIN, June 5
BERLIN, June 5 (Reuters) - Germany's HDB construction industry group said on Wednesday it expected sales growth of 2 percent this year despite obstacles such as a long, harsh winter and floods.
House building in the euro zone's biggest economy has benefited from low interest rates which encourage consumers to buy homes instead of parking their cash in banks.
Sales slumped nearly 10 percent in the first quarter due to the cold weather and the sector had started to recover when it was confronted with the worst floods in Germany in a decade.
Nonetheless, construction orders are at the highest level since 1999 at more than 27 billion euros, the HDB said.
"Even though the weather was not that favourable in the past few weeks, there are a lot of signs which suggest companies will manage to bounce back," HDB President Thomas Bauer said.
Bauer said the HDB was nonetheless sceptical whether the construction sector could continue to grow at a faster pace than the German economy. The German government sees the economy expanding by around 0.5 percent this year, and the International Monetary Fund this week halved its growth forecast to 0.3 percent.
Germany's economy propped up growth in Europe in the early years of the euro zone crisis but contracted in late 2012 and only narrowly escaped a recession by growing 0.1 percent in the first three months of this year thanks to private consumption.
Activity in Germany's private sector grew in May although firms cut jobs as they faced a fall in new contracts, a survey showed on Wednesday. (Reporting By Rene Wagner and Sarah Marsh; editing by Stephen Nisbet)
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