Eurozone construction sector contracts sharply - PMI
By Abigail Townsend
Date: Thursday 06 Mar 2025
(Sharecast News) - The Eurozone's troubled construction sector contracted sharply in February, a closely-watched survey showed on Thursday.
February's HCOB Eurozone construction PMI total activity index came in at 42.7, down sharply on January's 45.4 and the steepest drop in output for three months. A reading above the neutral 50.0 benchmark suggests growth, while one below it indicates contraction.
It was also notably worse than forecast, with most economists expecting no change.
Respondents pointed to a marked reduction in new orders across housing, commercial and civil engineering, although residential remained the worst-performing sector.
Among individual countries, the bloc's three biggest economies - France, Italy and Germany - all saw contractions in construction activity. The fastest decline was in France.
Tariq Kamal Chaudhry, economist at Hamburg Commercial Bank, said: "Although the European Central bank...has signalled a pause in the rate-cutting phase to await further dynamics, the construction sector makes it clear that a delay in rate cuts in interest-sensitive areas can be fatal.
"The outlook remains deeply pessimistic. Order intake is falling sharply, and business prospects for the next 12 months, despite a significant increase from the previous month, remain in contraction.
"Employment is shrinking correspondingly."
The HCOB Eurozone construction PMI is compiled from responses to surveys set to a panel of around 650 firms in Germany, France, Italy and Ireland. Data were collected between 10 and 28 February.
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