Eurozone construction falters on weaker demand
By Abigail Townsend
Date: Wednesday 06 Dec 2023
(Sharecast News) - The eurozone's construction sector continued to struggle in November, a closely-watched survey showed on Wednesday, as demand faltered.
The latest HCOB eurozone construction PMI total activity index was 43.4, nudging up from October's 10-month low of 42.7.
The index remains firmly in negative territory, however, and there was a sharp decrease in total output. Inflationary pressures also built, with input costs increasing at a faster pace.
Germany and France drove the drop in activity, with only Italian firms noting a rise. France's total activity index rose to 44.6 from 41.0 a month previously, while in Germany it fell from 38.3 to 36.2 - the lowest for more than three and half years.
In contrast, Italy's index rose to 52.9 from 51.8 in October.
The survey found that weak demand conditions were continuing to drive the overall downturn, as new orders fell across the sector once again.
Housing was the biggest drag. It has now been the worst-performing sector for 15 consecutive months. Commercial and civil engineering also saw a decrease in activity, however.
Cyrus de la Rubia, chief economist at Hamburg Commercial Bank, said: "The construction sector remains in the doldrums, with the housing segment enduring the deepest fall in activity.
"Amid the painful recession, input prices defy expectations by increasing at a faster pace.
"The construction sectors in eurozone countries navigate the storm of high-interest rates with varying degrees of resilience. Germany grapples with the most severe impact, a situation that has been exacerbated in November."
Germany is the eurozone's biggest economy.
The data were collected between 9 and 30 November. A reading below 50 indicates contraction while one above it suggests growth.
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