FX.co ★ Eurozone Construction Downturn Worsens

The HCOB Eurozone Construction PMI decreased to 45.3 in January from 47.4 in December, as demand remained sluggish and new orders decreased. All three of the major economies reported declines in output, with France experiencing the most significant reduction and Italy the least, while Germany returned to a marked decline following a brief uptick in December. Both housing and commercial construction sectors weakened, with commercial activity registering its most substantial drop since November 2024, even as civil engineering saw a slight increase. New orders continued to fall across the region, notably in France and Germany, leading firms to further reduce purchasing activities. Input costs surged at the fastest rate since April 2023, driven by increased operating expenses in Italy, France, and Germany. Despite the weak demand, employment rose for the first time since February 2023, as companies in Germany and Italy expanded their workforce. Overall sentiment remained pessimistic, albeit slightly less negative compared to recent months.