Eurozone construction activity falls further in October - IHS Markit

According to the report from IHS Markit, at 44.9 in October, the Eurozone Construction Total Activity Index, down from 47.5 in September, signalled an eighth consecutive monthly decline in output. Moreover, the rate of reduction was the quickest since May. The latest survey data indicated that activity declined across all three monitored construction sectors, with the sharpest fall seen in civil engineering, followed by the commercial sector. Furthermore, contractions were seen across the three largest eurozone economies, with France registering the most severe downturn.

Home building among eurozone construction firms was reduced at a quicker pace in October. The sharper decline brought to an end a three-month sequence of broadly similar, marginal contractions, and signalled renewed downward momentum in housing activity. The slight rise in residential construction in Germany, was offset by a marked decline in France and a renewed fall in Italy.

Work undertaken on commercial construction projects continued to contract during the latest survey period. The pace of decline quickened and was the fastest since May.

Meanwhile, civil engineering was the worst performing of the monitored sub-sectors in October, as infrastructure activity continued to decline sharply. The latest data signalled a further extension to the current sequence of contraction, with output falling for 15 successive months. 

Employment levels in the eurozone construction sector continued to shrink in the latest survey period. The rate of reduction was the sharpest for five months amid reduced output requirements. 

Eurozone construction companies were increasingly pessimistic regarding the year-ahead outlook for activity, as signalled by the Future Activity Index remaining below the neutral 50.0 threshold for the third month running.