According to the report from HCOB, activity in the construction sector continued to contract in November, while the pace of the contract accelerated slightly compared to October, and new orders fell at the strongest rate since September 2023. Meanwhile, business confidence has reached its lowest level since April 2020.
The eurozone construction PMI fell to 42.7 points from 43.0 points in October. The index remains below 50 points, which indicates a reduction in activity in the sector, for the 30th month in a row. The overall reduction in activity reflected declines across the three largest eurozone economies, led by the strongest fall in Germany since April. French firms recorded a strong decrease that was nonetheless the softest for a year, while firms in Italy saw the least pronounced decline since May.
The HCOB said that one of three broad areas of the construction sector recorded a lower output, with the housing sector being the worst performing sub-sector for the 27th consecutive month, though the robust decline was nonetheless the softest for 14 months. Civil engineering activity saw the softest fall since August, while commercial building firms recorded the strongest contraction for three months. New orders fell again in November (for the 31st month in a row), with the pace of contract being the most marked since September 2023. Employment in the construction sector also fell last month, while the rate of decline was little-changed from October and moderate overall. As for the inflationary situation, the rate of input price inflation accelerated from the previous survey period, but was well below the series average. The data also showed that construction companies in the euro area remained pessimistic regarding the year-ahead outlook for activity. The degree of pessimism was the most pronounced since April 2020.