Construction sector activity hits lowest since pandemic
06 January 2023
S&P Global Eurozone Construction PMI has reported that construction activity in the Eurozone has had the most profound fall since May 2020.
The S&P Global Eurozone Construction Total Activity Index saw this drop to 42.6 in the final month of 2022, down from 43.6 in November. Having now posted below the 50.0 no-change thresholds for eight months in a row, the latest reading was indicative of a sustained contraction in eurozone construction activity levels.
The survey, compiled by S&P Global from responses to questionnaires sent to purchasing managers, registered lower activity in December, with the most pronounced drop seen in France (41.0), closely followed by Germany (41.7). Meanwhile, activity at Italian firms returned to contraction territory (47.0) following a brief upturn in November.
The UK’s construction sector recorded a fall in business activity during December, ending a three-month sequence of growth. At 48.8 in December, down from 50.4 in November, the PMI is said to have registered below the 50.0 mark to signal the first contraction in construction sector output since August 2022.
Laura Denman, Economist at S&P Global Market Intelligence, said, “The eurozone construction sector ended the year on a negative note with a sharp fall in building activity, rounding off the worst quarterly performance since the COVID-related downturn in the second quarter of 2020. In fact, when excluding the pandemic, the reductions in total activity and new orders were the sharpest since March 2013 and September 2014.”
Despite the downward trend, Denman added, “There were, however, some positive developments within December data as evidenced by a sustained easing in both cost and supply pressures.”