According to the report from HCOB, activity in the construction sector continued to contract in July, while the pace of contract accelerated slightly compared to the previous months.
The eurozone construction PMI fell to 41.4 points from 41.8 points in May. The index remains below 50 points, which indicates a reduction in activity in the sector, for the 27th month in a row. The decline in activity was driven by broad-based contractions across the three monitored economies, led by the strongest fall in France since January. Italian firms recorded the steepest decrease in nearly two years, while firms in Germany saw a substantial, albeit slightly softer decline.
The HCOB said that two of the three broad areas of the construction sector recorded a lower output, with the housing sector being the worst performing sub-sector for the 23rd consecutive month and recorded the most marked reduction since April 2020. Commercial activity saw the sharpest fall for 6 months, while civil engineering firms recorded a slower reduction in activity. New orders in the construction sector fell again in July (for the 28th month in a row), while the rate of decline was the most marked since March. The labor force also declined last month, with the rate of job losses being the second-most pronounced in 2024 so far. As for the inflationary situation, input costs picked up from June but remained well below the series average. The data also showed that construction companies remained downbeat in their expectations for output over the coming year in July. The degree of pessimism worsened from June and was the most pronounced in the year to date.