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Thu May 19 2022

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Workload continues to grow for Eurozone contractors

8 May 19 Contractors in the Eurozone experienced a modest rise in total activity in April, extending the current sequence of expansion to two-and-a-half years.

Germany (red), France (blue) and Italy (orange)
Germany (red), France (blue) and Italy (orange)

 Across the euro area's three largest economies, the quickest expansion was seen in Germany, followed by Italy and France respectively.

The IHS Markit Eurozone Construction Purchasing Managers’ Index (PMI) fell fractionally from 52.2 in March to 52.1 in April, signalling a moderate rise in total construction activity.

The rate of growth was roughly in line with that recorded in March, as faster increases in both housing and commercial activity offset a contraction in civil engineering.

“The eurozone construction sector posted another rise in activity during April, supported by expansions in the monetary union's three largest economies,” said Eliot Kerr, economist at IHS Markit, which compiles the survey. “The rate of growth was broadly consistent with March, as a rebound in France and a quicker rise in Italy offset a slower increase in Germany.

“The fastest-growing sub-sector was housing, which recorded its strongest rise in activity during 2019 so far. There was also another slight rise in commercial activity, while civil engineering work fell for the first time since January.”

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There was a slower increase the growth of new orders and firms also reported a slower rate of workforce expansion. Costs continued to rise sharply, but the pace of inflation decelerated to its softest for a year.

The sharpest rise in activity was recorded in housing, as firms recorded their fastest increase in 2019 so far. Marginal growth in commercial activity also supported the rise in total activity. On the other hand, civil engineering work fell for the first time since January, reflecting declines in Germany, France and Italy.

New orders placed with Eurozone builders increased for the eighth month in a row during April. However, the rate of growth eased to its softest in that period and was only marginal overall.

Meanwhile, eurozone construction firms continued to increase staff numbers during April. Builders have taken on more staff in each month since February 2017. That said, the rate of job creation eased to its slowest since January in the latest survey period.

Firms remained optimistic for an increase in output over the coming year. They were less positive than in March but confidence levels remained stronger than the historical average.

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