According to the report from HCOB, activity in the construction sector continued to contract in December, but the pace of contract slowed to a 3-month low.
The eurozone construction PMI rose to 43.6 points from 43.4 points in November. The index remains below 50 points, which indicates a reduction in activity in the sector, for the 20th month in a row. Leading the downturn was a marked reduction In Germany, while France saw a steeper decline, and Italy recorded the strongest expansion since April 2022.
The HCOB said that all three broad areas of the construction sector recorded a reduction in activity, with the housing sector being the worst performing sub-sector for the 16th consecutive month. The contract in civil engineering activity softened, but there was a stronger and marked decline in commercial work, with the rate of reduction the steepest since July. New orders in the construction sector fell again in December, recording the 21st consecutive monthly decline, but the rate of decline was the weakest since August 2023. Faced with reduced workloads, eurozone constructors scaled back input purchasing. The latest decline in buying levels was sharp but the softest recorded in five months. As for the inflationary situation, in December the rate of input price inflation was strong, and the sharpest seen since April. The data also pointed to a decline in employment in the construction sector, but the pace of contraction was the slowest in four months. Continuing the trend seen since March 2022, eurozone constructors were downbeat regarding the year-ahead outlook for activity, with the overall degree of pessimism being the strongest for 13 months.