The decline in construction activity across the euro area eased slightly in September, but the economic downturn remains strong, with all member states reporting a contraction in construction activity.
The Eurozone Construction Purchasing Managers' Index (PMI), compiled by S&P Global and Hamburg Commercial Bank, rose to 42.9 last month after hitting a six-month low of 41.4 in August.
However, the PMI has now remained below the critical 50 point mark that separates growth from contraction for 29 straight months.
Activity declined in all three monitored sectors covered by the report, with residential activity seeing the most significant decline, but commercial and civil engineering activity also had a relatively large drop, the survey showed.
Demand is said to be “subdued,” and the level of new orders continues to decline in September, albeit at the lowest level since February 2023. Due to a decline in new orders, construction companies have made “significant reductions” in their workforce, including employment rates. The loss was the largest since hitting a four-year high in May.
“There is no room for optimism at this point,'' said Tariq Kamal Chowdhury, an economist at HCOB.
“Orders have fallen alarmingly and purchasing volumes are depressed. It is not surprising that the outlook for future activity remains pessimistic. […] “The ECB's tightening of monetary policy is very welcome to boost the construction sector, but the ECB's recent announcements do not seem to be uplifting the industry,” Chaudhry said.
