Eurozone construction PMI rises from 20-month low, but contraction continues

(Sharecast News) - The decline in activity across the eurozone construction sector eased slightly in May after contracting by the most in 20 months in April, though price and supply disruptions continued to hamper the industry. The S&P Global eurozone construction purchasing managers' index (PMI) increased to 43.7 in May from 41.7 in April, which was the lowest level since August 2024.

The decline in new orders eased slightly but "remains marked", according to S&P Global.

Input cost inflation eased from a three-and-a-half-year high in April, but stayed well above the long-term average, while average lead times lengthened to their highest levels since December 2022.

"Operating conditions in the eurozone construction sector remained in poor shape during May. The three main sectors monitored by the survey continued to see sharp, albeit softer declines in total activity, led by the residential sub-sector," said Usamah Bhatti, economist at S&P Global Market Intelligence.

"Anecdotal evidence suggested that difficulty sourcing and receiving inputs due to shipping delays, amid higher fuel and transportation costs, were key reasons behind disruption to the sector. These were often linked to the residual disruption caused by the war in the Middle East."