Decline in EZ building activity eases in Jan but outlook remains 'bleak' - PMI
By Frank Prenesti
Date: Thursday 06 Feb 2025
(Sharecast News) - The decline in eurozone construction activity eased to its slowest pace in almost two years, although new orders continued to fall markedly amid a bleak outlook, according to a survey published on Thursday.
The HCOB Eurozone Construction PMI Total Activity Index - a seasonally adjusted index tracking monthly changes in total industry activity - rose to 45.4 in January from 42.9 in December, indicating a sharp, but softer contraction in activity across the euro area construction sector.
A mark above 50 indicates expansion. The latest downturn extended the current sequence of falling activity to 33 months but was the softest since February 2023, HCOB said, although construction companies remained pessimistic regarding the outlook for activity over the coming year.
HCOB economist Tariq Kamal Chaudhry said the among the major economies, Italy was "pulling the index up, while Germany and France are dragging it down".
"The crisis is profound. All subsectors are contracting: residential construction, commercial construction, and civil engineering. The only advantage of the current situation is that price growth, both for inputs and subcontractors, is slow."
"The outlook remains bleak. Orders are evaporating at an alarming rate, well below the historical average. Business expectations are at rock bottom, with no sign of imminent improvement. In light of this challenging situation, construction companies continued their massive layoffs in January. The only glimmer of hope was that the rate of job cuts fell to its lowest level in five months."
"The sustained downturn also contributed to further, albeit softer reductions in both employment and purchases, while subcontractor use also fell markedly. Supply chain performance deteriorated in January, and at the greatest extent in nearly a year, while input cost pressures picked up to a 12-month high," it added.
Reporting by Frank Prenesti for Sharecast.com
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