Eurozone construction activity falls further in September

According to the report from IHS Markit, at 47.5 in September, the Eurozone Construction Total Activity Index signalled a seventh consecutive monthly decline in output. Moreover, falling from 47.8 in August, the rate of reduction was the quickest since May. Home building, infrastructure work and commercial projects all contracted, with the sharpest downturn recorded for the latter. Nationally, there were falls in construction activity across Germany and France, with growth sustained in Italy.

Commercial building activity fell sharply and at the fastest pace since May. The decline was also the fastest of the three types of activity tracked by the PMI survey. Home building among eurozone constructors decreased only marginally, with the pace of reduction matching that seen in August. Civil engineering activity across the currency bloc fell markedly, with the decline being the fourteenth in as many months. 

Eurozone builders continued to record lower demand for their services in September. As a result, the current sequence of falling new orders was extended to seven months. Moreover, the rate of contraction was solid and the quickest since June. 

Faced with subdued demand conditions, eurozone constructors reduced payroll numbers for the seventh month in a row during September. Despite quickening from August, the pace of contraction was slight overall. 

Sentiment among eurozone construction companies remained negative at the end of the third quarter. Lower output was predicted (on average) by firms in Germany and France, with the former the most pessimistic towards the outlook during September. Conversely, Italian builders foresee activity growth in the year ahead, with optimism strengthening from August.