Eurozone construction activity falls to six-month low

The eurozone construction sector remained deeply in contraction in July, with activity falling sharply, according to the latest HCOB PMI data. The total activity index dropped to 41.4 from 41.8 in June, marking a six-month low.

The decline was driven by a significant drop in housing activity, the worst-performing segment, along with weak demand and a robust fall in new business.

Employment in the sector decreased at a faster rate, and companies continued to cut costs, including reducing input buying and subcontractor use.

Input costs rose modestly, with Italy seeing the sharpest increase and Germany recording a decline. The decline in new orders was the steepest since March, leading to further job cuts.

The downturn affected all major eurozone economies, with France experiencing the strongest fall and Italy experiencing the steepest decrease in nearly two years.

Construction firms across the region remained pessimistic about future output, with expectations at their lowest for the year.

Attribution: S&P Global