Breaking news: Eurozone construction can withstand ‘sustained contraction’, survey says


The eurozone construction sector is enduring a “sustained contraction”, according to the latest closely watched monthly survey.

December’s S&P Global Eurozone Construction PMI, released on Thursday, showed a total activity index of 42.6, down from 43.6 in November. Figures below 50 show declining activity. December marked the eighth consecutive month of contraction.

Activity fell in all three of the 20-nation bloc’s largest economies – Germany, France and Italy.

The figures, based on a survey of purchasing managers at 650 construction firms, are the latest sign of falling activity in European economies affected by the war in Ukraine and the resulting rise in energy and other costs.

“The latest reading was indicative of a sustained decline in the level of construction activity in the eurozone,” the survey’s findings said.

Laura Denman, an economist at S&P Global Market Intelligence, said the sector had ended 2022 on a “negative note” with a “sharp drop” in construction activity.

The last three months of 2022 marked the index’s worst quarterly performance since the April to June quarter of 2020, when figures were hit by the effects of the coronavirus pandemic.

Excluding the effects of the pandemic, overall activity fell at the sharpest rate since March 2013 and new orders at the fastest rate since September 2014.

“Data from December suggested that firms anticipated challenging economic conditions to continue into the future,” Denman said.

However, she added that there was a “sustained easing” in both cost and supply pressures.

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