Eurozone construction sectors boosted in February by German and French recovery

Construction firms in the Eurozone were boosted last month by an upturn in building activity following a slow start to the year.

German firms led the way with a sharp rise in activity, while there was also a return to expansion in France, according to the widely-regarded IHS Markit purchasing managers’ index (PMI).

Read more: Eurozone economic confidence falls to fresh two-year low

PMI rose to 52.6 from just above the no-change threshold of 50 in January.

But Italian firms saw a growth slowdown for the fourth consecutive month.

Across the bloc activity expanded in all three sub-sectors, with the fastest rise coming in house building industry.

Civil engineering activity rebounded ending three consecutive months of decline, and commercial building also expanded.

But input price inflation rose at its fastest pace since March 2012, which IHS Markit warned could continue to squeeze margins and hinder profitability.

Strong inflows of new business, most notably in Germany, produced greater workloads and had a positive impact on hiring.

Weaker demand for work had held the sector back in January, forcing employment growth down to near-two-year lows.

“The eurozone construction sector posted a stronger set of numbers in February,” IHS Markit economist Eliot Kerr said.

“The accelerations in activity and new order growth will be a welcomed boost for builders after January’s slowdown.”

Read more: Eurozone inflation falls in January as energy prices continue to drop

Optimism among construction firms in the single currency bloc rose to its highest level in eight months.

German and Italian firms reported renewed confidence, while sentiment fell in France.