Europe construction output shows healthy growth in January

Construction output in Europe showed significant growth in January compared to the previous month, According to data from Eurostat, the statistical office of the European Union, released on Tuesday.

Seasonally-adjusted figures showed a 3.9% increase in the eurozone, and a 3.5% increase in the wider EU.

The upturn followed a decline in December, when construction output fell 2.3% in the eurozone and 2.0% in the EU.

Year-on-year data also showed growth, with a 0.9% increase in construction output in the euro area and a 1.4% increase in the EU compared to January last year.

A closer look at the data showed that building construction experienced a 1.4% increase in the common currency bloc, and a 1.5% increase in the wider union.

However, civil engineering saw a 1.9% decrease in the eurozone, while a modest 0.5% increase was recorded in the EU at large.

Among member states, Slovenia led the way with a 26.7% annual increase in construction output, followed by Slovakia at 14.7% and Portugal at 6.3%.

On the other hand, Belgium, Hungary, and Finland saw the largest decreases, with declines of 4.7%, 3.6%, and 2.7% respectively.

“Eurozone construction came roaring back at the start of the year, primarily due to a surge in German construction as many building sites reopened after an unusually large amount of frost days in December had kept them closed,” noted economists at Pantheon Macroeconomics.

“Overall, output advanced by 0.4% quarter-on-quarter, and the January number now points to a further, and stronger, increase in the first quarter.”

They said the carry-over - the increase over the first quarter if output remained unchanged at its January level in February and March - would be 2.3%.

“That’s probably wishful thinking for the first quarter as a whole, but it’s a good start.”

Reporting by Josh White for Sharecast.com.