Eurozone construction activity eases in April

The Eurozone’s construction sector faltered in April, official data showed on Monday.

According to initial estimates published by Eurostat, the European Union’s statistics office, seasonally-adjusted production in the construction sector fell by 1.1%, down on March’s marginal 0.1% rise. March's figure was revised upwards from 0.0%.

Across the wider EU, production fell by 1.2% in April and rose by 0.1% in March.

Year-on-year, production in construction was ahead 3.0% in both the Eurozone and the EU in April.

Driving the fall was a 5.5% slide in civil engineering activity across the Eurozone, which more than reversed the previous month’s 2.0% increase. Building construction nudged 0.1% higher.

In the EU, civil engineering was down 6.1% and building construction 0.2%.

Among individual countries construction activity rose in France and Spain, but fell sharply in Germany, the bloc’s biggest economy, and in Italy. In Germany, activity declined 2.1% month-on-month, the third consecutive monthly fall.

Melanie Debono, senior Europe economist at Pantheon Macroeconomics, said: "The carryover, if the level of construction activity remains at April’s level throughout the second quarter, implies that construction will be a drag on GDP growth this quarter.

"It implies that activity will fall by 0.7% quarter on quarter, after rising 3.7% over the first quarter as a whole. We think it will probably fare slightly worse, perhaps falling by 1% to 1.5%."

The construction industry is facing ongoing raw material and labour shortages, supply chain delays and surging input prices, much of which has been exacerbated by the war in Ukraine. The latest S&P Global construction purchasing managers’ index, released in May, showed construction activity had fallen in May in the Eurozone for the first time in nine months.