Eurozone construction growth slows to lowest level in four months

PETALUMA, CA - JANUARY 21: A worker carries lumber as he builds a new home on January 21, 2015 in Petaluma, California. According to a Commerce Department report, construction of new homes increased 4.4 percent in December, pushing building of new homes to the highest level in nine years. (Photo by Justin Sullivan/Getty Images)

Growth in the Eurozone construction industry slowed to a four month low in May as new orders declined for the first time since August last year.

The IHS Markit Eurozone Construction PMI fell from 52.1 in April to 50.6 last month, however firms remained optimistic towards the business outlook.

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Across the Eurozone’s three largest economies, Germany had the quickest rate of growth followed by France. Italy reported its first decline in construction activity since March last year.

Housing was the strongest-performing subsector, recording an increase in activity for the ninth consecutive month.

Civil engineering was the poorest performing sector, and work fell at its fastest rate since July 2016.

Job creation continued however, the latest increase was the softest since February last year.

“Activity growth in the eurozone construction sector softened midway though the second quarter, driven by the first decline in new work for nine months,” Eliot Kerr, IHS Markit economist, said.

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“Across the eurozone’s three largest economies, the only reduction in total activity was recorded in Italy, but there were also slower increases in both Germany and France.

“At the sub-sector level, housing continued to outperform both commercial construction and civil engineering.

“Although the rate of growth eased, home builders saw a modest rise in activity. Meanwhile, work undertaken on commercial projects increased only slightly, while civil engineers recorded the steepest decline since July 2016.”