Figures from the S&P Global showed that in January, activity in the construction sector of the eurozone continued to contract, but noticeably improved compared to December, and reached the highest level since June 2022.
The Eurozone Construction PMI rose in January to 46.1 points from 42.6 points in December. Economists had expected an increase to only 43.1 points. The index remains below the 50-point mark, which indicates a reduction in activity, for the 9th month in a row.
The data also showed that a decline in activity was recorded in all three sectors, with commercial construction projects falling at the slowest rate. Concurrently, softer but still sharp falls in activity were signaled for residential and civil engineering. Meanwhile, new orders in the construction sector declined again in January, but the rate of decline was the weakest since June 2022. The decline in orders was due to high economic uncertainty, although some firms noted a slow recovery in demand. The rate of input cost inflation cooled further at the start of 2023, but remained marked overall. Notably, the latest increase was the softest seen in two years. Meanwhile, employment in the construction sector continued to decline in January, but the pace of decline was the slowest since June 2022. The data also pointed to a softer degree of pessimism among eurozone construction companies regarding the year-ahead outlook. The degree of negative sentiment was the softest since June 2022.