Eurozone construction activity declines further in June
By Josh White
Date: Friday 04 Jul 2025
(Sharecast News) - Eurozone construction activity declined at its sharpest pace in three months in June, as falling new orders and renewed pessimism among builders weighed on the sector.
The latest HCOB construction purchasing managers' index (PMI) data showed the total activity index falling to 45.2 from 45.6 in May, signalling a steeper contraction in overall output.
That downturn was led by accelerated declines in both residential and commercial building, with housing remaining the worst-performing segment.
Commercial activity also deteriorated at the fastest rate in four months.
However, civil engineering work offered a rare bright spot, growing for the first time since March 2022 across all three major economies monitored.
The weakness was most pronounced in France, which saw the fastest decline in activity, while Germany continued its downward trend. Italy was the only country to report growth, though the expansion was marginal.
New business continued to shrink across the eurozone, reflecting deteriorating demand conditions, particularly in Germany and France.
Italian firms, by contrast, reported a seventh consecutive monthly rise in new orders.
Cost pressures intensified for the fourth month running, with input price inflation reaching its highest level since December 2023.
German firms faced the steepest increase in operating expenses since early 2023, while French and Italian companies also saw notable rises, albeit more subdued in Italy.
As a result, subcontractor fees rose at the fastest pace since September 2023.
However, firms noted a further decline in the quality of subcontractor work, contributing to a continued fall in their usage despite increased availability.
Firms responded to the demand slowdown by scaling back employment for the 28th straight month.
Job cuts were strongest in France, with more moderate declines in Germany. Italy bucked the trend, posting its fastest increase in staffing since March.
Purchasing activity also fell again in June, marking more than three years of monthly decline. France and Germany reported sharp drops in input buying, while Italy saw a return to growth.
Delivery times for materials were largely stable, although Italian firms experienced marked delays and French firms reported renewed pressures.
This was offset by further improvements in supplier performance in Germany.
Confidence in future activity weakened again, with firms overall expecting a decline in output over the next 12 months.
Sentiment remained subdued in France and Germany, but Italian constructors were the most optimistic they've been in over a year.
Reporting by Josh White for Sharecast.com.
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