AUS
NZ
UK
CA
USA
IND
Highlights:
- Eurozone construction sector remains in decline: PMI increases slightly to 42.9 in September, but contraction continues for 29 straight months.
- All three key sectors shrink: Residential construction faces the steepest decline, with commercial and civil engineering activity also down.
- Job cuts intensify: Employment in the construction sector sees the highest rate of job losses since May, as demand remains subdued.
The eurozone construction sector continued its decline in September, though the downturn eased slightly from the previous month. The construction purchasing managers' index (PMI), compiled by S&P Global and Hamburg Commercial Bank, showed an increase to 42.9 in September, up from 41.4 in August. Despite this modest improvement, the PMI has remained below the crucial 50-point level, indicating contraction, for 29 consecutive months. Every eurozone member state reported a decline in construction activity.
Ongoing Downturn Across All Sectors
The September survey showed contraction across all three key construction sectors: residential, commercial, and civil engineering. Housing construction suffered the steepest drop in activity, while commercial and civil engineering sectors also recorded significant declines. New orders continued to fall, albeit at a slower pace compared to earlier in the year, providing little relief to an industry under considerable pressure.
Employment in the construction sector also saw substantial cuts as companies adjusted to the ongoing weakness in demand. The rate of job losses in the sector reached its highest level since May 2023, as construction firms grappled with declining order volumes.
Lack of Optimism in the Industry
Tariq Kamal Chaudhry, an economist at Hamburg Commercial Bank, highlighted the prevailing pessimism within the sector. "There’s no room for optimism right now," he said, citing falling order intakes and low purchasing volumes. He further expressed concern about the lack of a clear monetary boost from the European Central Bank (ECB), which he believes could help revive the ailing construction sector.
Despite hopes for supportive policies from the ECB, recent communications from the bank have done little to uplift sentiment within the industry. As the outlook remains grim, the sector appears to be bracing for a prolonged downturn unless new economic measures are introduced.
