Construction output strengthens in Eurozone

The Eurozone’s construction sector strengthened in February, official data showed on Wednesday.

According to Eurostat, the statistical office of the European Union, seasonally-adjusted production in the construction sector increased by 2.3% in February, and by 2.0% across the wider bloc.

The growth was, however, slower than January’s, when production in the sector increased by a downwardly-revised 3.8% in the Eurozone and by 3.3% in the EU.

Year-on-year, construction output rose 2.3% and 2.1% in the Eurozone and EU respectively.

February’s rise was particularly pronounced in civil engineering, with output up by 3.6%, although building construction also sparked 2.1%. Among individual member states, production rose by 1.5% in Germany, the EU’s largest economy, by 1.4% in Spain and by 1.6% in France.

Melanie Debono, senior Europe economist at Pantheon Macroeconomics, said: “Output in Germany rose by 1.5% on the month, after a 13.6% surge in January, as the sector continued to recover from its frost-related slump in December.

“If Eurozone construction output held steady at its February level in March, it rose by 3.7% in the first quarter overall, much better than the 0.4% rise in the fourth quarter of 2022.”

Riccardo Marcelli Fabiani, economist at Oxford Economics, said: “Most countries for which data is available saw expansions, and growth was particularly strong in Austria, up 13.3%.

“While the data suggest construction will add to GDP growth in the first quarter, order books continue to decline and the sector will be one of the most hit by the monetary tightening via the impact on demand and financing.”