Eurozone’s downturn in construction continues

The findings came in the latest IHS Markit Eurozone Construction Purchasing Managers’ Index (PMI). which is compiled by IHS Markit from responses to questionnaires sent to purchasing managers in a panel of around 650 construction firms in the eurozone.

The headline figure is the Total Activity Index, which tracks changes in the total volume of construction activity compared with one month previously. The index slipped to 45.5 in December from 45.6 in November, signifying a further solid contraction in construction activity.  The latest fall extended the current sequence of decline to ten months, although the rate of reduction remained far softer than at the nadir of the downturn caused by the Covid-19 pandemic in April.

Latest data showed a broad-based downturn in output across the three monitored sub-sectors, with the sharpest decline recorded in commercial construction, followed by civil engineering activity. Meanwhile, housing activity fell once again in December.

The findings came in the latest IHS Markit Eurozone Construction Purchasing Managers’ Index (PMI). which is compiled by IHS Markit from responses to questionnaires sent to purchasing managers in a panel of around 650 construction firms in the eurozone.

The headline figure is the Total Activity Index, which tracks changes in the total volume of construction activity compared with one month previously. The index slipped to 45.5 in December from 45.6 in November, signifying a further solid contraction in construction activity.  The latest fall extended the current sequence of decline to ten months, although the rate of reduction remained far softer than at the nadir of the downturn caused by the Covid-19 pandemic in April.

Latest data showed a broad-based downturn in output across the three monitored sub-sectors, with the sharpest decline recorded in commercial construction, followed by civil engineering activity. Meanwhile, housing activity fell once again in December.

Usamah Bhatti, economist at IHS Markit, said: “Eurozone construction companies reported a continued downturn in activity during December, while incoming business also fell at a solid, albeit softer pace. With appetite for new construction projects remaining subdued, firms across the bloc reduced workforce numbers at a slightly quicker pace in the latest survey period. Concerns surrounding the longer-term impact that the pandemic will have on the wider construction sector, alongside a lack of new projects in both the public and private sector being bought to tender resulted in an extension to the pessimistic outlook held by eurozone-based builders for a fifth month in a row. By country, France and Germany continued to report further declines in construction activity, with the former signalling the steepest fall since May. Italian firms on the other hand registered marginal growth for the first time since September.”

The result indicated the tenth consecutive fall in housing activity, with the pace of decline quickening from the previous survey period. The reduction was driven by a further, marked fall in France, while German and Italian firms signalled marginal expansions in home building activity.

Read more at The Construction Index