The report from S&P Global and Hamburg Commercial Bank (HCOB) showed
Thursday that the pace of contraction of the companies’ activity in the Eurozone’s
construction sector deepened steeply in June.
According to the report, the HCOB Eurozone construction PMI fell to 41.8
in June from an unrevised 42.9 in May. The latest reading was the lowest since January
(41.3) and indicated a marked shrinkage in output across the region’s construction
sector.
Economists had forecast the indicator to rise to 43.6. The 50 mark
divides contraction and expansion.
According to the report, production levels continued to reduce across
all three of the major Eurozone countries, with German construction firms witnessing
the greatest slump in performance. Meanwhile, the French and Italian
construction sectors also saw faster reductions - the former recorded its
sharpest decrease in output since March and the latter posted its steepest decline
in nearly two years. Weakness in output levels across the euro area
construction sector was mainly attributed to a sustained fall in new order inflows.
Against this backdrop, employment levels and the level of purchases fell. On
the price front, the Eurozone’s construction sector registered only a marginal rise
in input costs during June. The rate of inflation was the slowest recorded in
almost a year, with modest gains in France and Italy partially offset by a
third straight drop across Germany.