Eurozone construction sector continues to struggle - PMI

(Sharecast News) - Output fell sharply across the Eurozone construction sector in October, a closely-watched survey showed on Thursday. The HCOB Eurozone construction PMI total activity index shed two points to 44.0, the most pronounced decline in eight months.

A reading below the 50.0 benchmark indicates contraction, while one above it suggests growth.

Respondents flagged a sharp reduction in new orders, especially in the housing and civil engineering sub-sectors.

Cost pressures continued to ease, reaching the lowest in seven months. But that did little to buoy confidence, with businesses remaining downbeat about output for the coming year.

Among individual countries, both Germany - the bloc's biggest economy - and France reported sharp declines in construction activity.

Germany's PMI fell to 42.8 from 46.2, while France's slumped to 39.8 from 42.9.

In contrast, Italian companies saw marginal growth, the first for four months, with the PMI rising to 50.7 from 49.8.

Cyrus de la Rubia, chief economist at Hamburg Commercial Bank, said: "One thing seems pretty clear: the construction sector won't be driving growth in the Eurozone anytime soon. The sector has slowed down expansion across the currency union since 2022.

"Germany's sector is sinking deeper into the proverbial swamp. And with the political situation getting more fragile, France looks set to follow Germany's path."

A panel of 650 construction firms were surveyed, with data collected between 9 and 31 October.