Euro area construction output falls in May

Construction output in the single currency bloc shrank in May, led by declines in almost all the major economies, save Italy.

Total production from the sector declined by 0.7% month-on-month, according to Eurostat, following a small rise of 0.3% in April.

Nonetheless, in terms of quarterly rates of change, output had risen by 0.6% over the first three months of 2017 after a flat outcome in the fourth quarter of the previous year.

In comparison to the previous month, output fell by 1.0% in Germany, -1.4% in Spain, -1.2% in France and by -2.2% in the Netherlands.

Output from building was down by 0.6% and than in civil engineering by 0.9%.

Italian construction output on the other hand grew by 2.7%.

Output in Slovenia was weakest, shrinking by 10.6% versus April.

Nonetheless, Claus Vistesen at Pantheon Macroeconomics linked the above to a temporary halt on public roadworks and infrastructure, while dismissing the fall in total euro area output as "trivial".

"We are pretty sure, however, that construction performed well over Q2 as a whole. We forecast a 0.8% month-to-month rise in June, which would translate into a quarter-on-quarter rate of 1.2%, higher than the 0.7% rise in Q1. Overall, the trend is firm and we think investment and output in EZ construction will continue to support GDP growth in the second half of the year."