According to the report from HCOB, activity in the construction sector continued to contract in February, but the pace of contract slowed compared to January.
The eurozone construction PMI rose to 42.9 points from 41.3 points in January. The index remains below 50 points, which indicates a reduction in activity in the sector, for the 22th month in a row, with firms in Germany and France registering robust decreases in activity. Italy was alone in signaling growth in February, though here the pace of expansion slowed to a fractional pace.
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 18th consecutive month. The sector also recorded the sharpest decline since August 2023. Rates of contraction across the commercial and civil engineering sectors eased and were at the softest in three and six months respectively. New orders in the construction sector fell again in February, recording the 23rd consecutive monthly decline. Meanwhile, the growth of input prices slowed down compared to January and reached a 4-month low. Despite historically muted increases in cost burdens, weak demand meant construction firms remained in retrenchment mode and lowered input purchases further. The data also pointed to a decline in employment in the construction sector, but the pace of contract was the slowest since May 2023. Meanwhile, the reduction in new order inflows led to firms remaining pessimistic towards the outlook for output over the coming year. Construction companies have now signaled falling confidence for two years running, though the latest deterioration was the softest since April 2023.