According to the report from HCOB, activity in the construction sector continued to contract in September, but the pace of the contract weakened compared to the previous months. Overall, eurozone construction companies remained pessimistic regarding the outlook for activity over the coming year.
The eurozone construction PMI rose to 42.1 points from 41.4 points in August. The index remains below 50 points, which indicates a reduction in activity in the sector, for the 28th month in a row. The overall reduction in activity reflected declines across the three largest eurozone economies. Activity in Germany decreased at the fastest pace since May 2020. German and Italian firms saw activity decrease at the softest rates for 16 and 4 months respectively.
The HCOB said that all three broad areas of the construction sector recorded a lower output, with the housing sector being the worst performing sub-sector for the 25th consecutive month. Falls in commercial and civil engineering activity were also relatively strong. New orders fell again in September (for the 29th month in a row), but the rate of decline was the weakest since February 2023. Employment in the construction sector also fell last month, while the rate of decline was the strongest since May's four-year record. As for the inflationary situation, the rate of input price inflation eased from that seen in August. The data also showed that construction companies in the euro area remained pessimistic regarding the year-ahead outlook for activity, while the degree of pessimism strengthened from August amid stronger negative forecasts in both Germany and France.