On the back of the collapse of Philipp Holzmann, German government and construction bodies have released depressing statistics on the sector. The finance ministry showed a month-on-month drop in activity in April of 3% – a significant result because construction makes up 12% of Germany's total output.
The continuing slump in construction work has led to predictions of 40,000 job losses and to the prospect of strike action by members of the IG Bau. This would be the first nationwide strike in the construction sector in 50 years.
Analysts claim the industry will take at least two years to get out of the slump. "That will make it seven consecutive years of lower output," says Seymour Pierce analyst Leslie Kent. "There are definite structural problems with the industry out there."
Analysts said they were surprised that the German slump had yet to impact on materials firm RMC, which has significant operation in the country. Its shares were down 2p at 702p earlier this week.