Eurozone construction downturn deepens in September on weak demand

Eurozone construction activity declined at a faster pace in September, weighed by weaker demand and lower new orders, survey data from Hamburg Commercial Bank and S&P Global showed Monday.

The HCOB Eurozone construction purchasing managers' index fell to 46.0 points in September from 46.7 in August, remaining below the 50.0-point threshold that separates growth from contraction.

The reading came in line with the FXStreet-cited consensus.

Housing activity saw the steepest drop in three months, while commercial building output fell at the fastest rate since November 2024. Civil engineering activity also slipped modestly after rising in June and August.

New orders decreased sharply again, with France and Germany seeing the largest declines. Italy, however, recorded its first increase in new work in three months.

Employment levels continued to fall across the bloc, though the rate of job losses eased to the softest in six months. Italian firms continued to add jobs for a thirteenth consecutive month.

Input prices rose at a stronger pace, led by higher costs in Germany, while subcontractor rates also increased. Supplier performance deteriorated further, particularly in France and Italy, amid longer delivery times.

Business confidence weakened to its lowest since January, with French firms the most pessimistic and Italian firms showing the least negative outlook.

"The downturn in eurozone construction activity deepened in September," said Nils Muller, junior economist at Hamburg Commercial Bank. "Weak demand conditions continued to weigh on output, with housing and commercial segments particularly hard hit. Rising costs and deteriorating supply conditions suggest little near-term relief for the sector."

The HCOB Eurozone Construction PMI is compiled from responses to questionnaires sent to around 650 construction firms in Germany, France, Italy and Ireland. Survey responses are collected in the second half of each month.

Last week, S&P Global data showed that the Eurozone services PMI rose to 51.3 points in September from 50.5 in August, while the manufacturing PMI slipped to 49.8 from 50.7. The composite PMI, which combines both sectors, inched up to 51.2 in September from 51.0 in August.