Eurozone construction downturn continues as new orders, staffing levels sink
The decline in construction across the eurozone eased slightly in September, but the downturn remained firmly entrenched, with every member state reporting a contraction in activity.
The eurozone construction purchasing managers' index (PMI), compiled by S&P Global and Hamburg Commercial Bank, increased to 42.9 last month, after hitting a six-month low of 41.4 in August.
However, the PMI has now remained below the key 50-point level which separates growth and contraction for 29 straight months.
All three monitored sectors covered by the report saw declines in activity: housing activity saw the most pronounced decrease, though falls in commercial and civil engineering activity were also relatively strong, the survey showed.
Demand was said to be "subdued", with new order levels continuing to fall in September, albeit at their softest rate since February 2023. Due to falling new orders, construction firms made "considerable cuts" to their workforces, with the rate of job losses at its highest since hitting a four-year high in May.
Tariq Kamal Chaudhry, HCOB economist, said "there’s no room for optimism right now".
"Order intakes are shrinking alarmingly, and purchasing volumes are in the doldrums. It’s hardly surprising that the outlook for future activity remains pessimistic. [...] A monetary policy boost from the ECB would be more than welcome to revive the construction sector, but the ECB’s recent communications hardly seem to lift spirits in the industry," Chaudhry said.