Eurozone construction activity continues to fall in February

According to the report from IHS Markit, the Eurozone Construction Total Activity Index ticked up from 44.1 in January to 45.0 in February, indicating a softer, albeit solid decline in construction activity. The latest contraction meant that eurozone construction activity has now declined for a full year, as companies continued to note the impact of the coronavirus disease 2019 (COVID-19) pandemic on construction projects as well as reduced order volumes. The downturn was broad based across the three monitored subsectors, with the sharpest decline recorded in civil engineering activity, followed by commercial construction.

Work undertaken on housing by eurozone construction firms decreased further in February. The decline marked the twelfth consecutive monthly fall in activity although the pace of contraction eased slightly from that seen in January. That said, the reduction remained solid. 

Meanwhile, commercial construction activity contracted again in the latest survey period. Yet, the pace of the decrease eased slightly from January, and the softest recorded since September 2020. 

The downturn in eurozone civil engineering activity continued in February, as work undertaken on infrastructure projects contracted sharply. The rate of decline was the quickest since May 2020, and the fastest among the monitored sub-sectors.

Employment levels among eurozone constructors decreased further in the latest survey period. That said, the pace of job shedding eased and was marginal overall.

Despite activity and order books remaining subdued, eurozone construction companies signalled stronger optimism regarding the outlook for activity over the coming 12 months. This marked the second successive month of positive sentiment among the bloc's constructors, and was the strongest recorded since February 2020.