October: -1.4% m/m, -2.8% y/y
September: -1.5% m/m (revised from -1.3%)
August: -0.2% m/m (revised from -0.4%)
July: +1.7% m/m (revised from +2.1%)
June: -1.3% m/m (revised from -1.2%)
—

PARIS (MNI) – Construction activity in the Eurozone contracted
further in October to a ten-month low on declines in both building and
civil engineering, Eurostat said Monday.

The 1.4% monthly downturn left activity 2.8% lower on the year and
2.5% below the 3Q average, which had recovered by 0.3% after gains of
0.1% in 2Q and 1.1% in 1Q.

Building activity alone dropped 1.6% in October to stand 3.6% lower
on the year. Civil engineering was down 1.4% on the month and 0.6% below
the previous-year level. (The latest seasonally adjusted monthly
estimates are based on data from only six of the Eurozone’s 17 member
states.)

Leading indicators suggest that the timid recovery in construction
is at an end and that the sector is being drawn into the cyclical
downturn that has gripped the rest of the economy.

Home building permits fell 4.9% in 2Q, and 3Q brought further
declines in Germany, Portugal, Finland and Slovenia, but further gains
in France and Slovakia, separate Eurostat data show.

Sector sentiment has hovered well below the long-term average over
the past six months, according to the European Commission’s barometer.
Builders polled in November said recent output had weakened markedly
despite some recovery in orders.

The monthly survey of the magazine Construction Europe signaled a
recovery in sector sentiment in December after a plunge in November.
“Compared to November’s starkly negative results, December’s survey has
seen sentiment moderate a little, returning to a large extent to the
indecisive, directionless territory it inhabited for most of the late
summer and autumn,” said the magazine’s editor.

In Germany, activity edged up 0.4% in October after a 3.1% slide
since July, to stand 1.6% higher on the year. Although prospects are
most promising here, sector sentiment as measured by the Ifo institute
has been on a downward trend since mid-year and the six-month outlook
has eroded sharply, even though November brought a modest recovery.
Demand for new housing should prove resilient, but commercial
construction is likely to suffer as the economy slows.

In France, activity slipped another 0.5% on the month after a 1.8%
downturn in September, and it was 0.7% lower on the year. Construction
firms surveyed by Insee this month said activity remained weak and they
expected no improvement in the coming months.

Eurostat no longer publishes adjusted monthly data from Spain “due
to the volatility of their current working day adjusted data series.”
The annual comparison for October showed a 4.0% decline. Despite the
persistent overhang of unsold housing, government officials have raised
hopes for a turnaround in activity by the end of the year. While
builders polled in November were less downbeat about order book levels,
they said activity had weakened sharply after a recovery in October, the
Commission’s survey showed.

As usual, no results for Italy were available for the reporting
month. Activity fell 4.4% in September to stand 5.8% lower on the year.
Sector sentiment recovered in October to a four-month high, while
remaining far below levels seen before the recession, according to
Istat. Firms reported an improvement in activity and orders and were
slightly less pessimistic about future projects.

Elsewhere, construction in the Netherlands fell 1.3% in October to
stand 3.5% lower on the year. Activity in Portugal dropped 9.7% after a
5.0% downturn and was 11.3% lower on the year. Slovenia posted a 14.1%
plunge that left activity 25.3% lower on the year. In Slovakia, activity
recovered 0.9% on the month but was 1.2% lower on the year.

–Paris newsroom +331 4271 5540; e-mail: ssandelius@marketnews.com

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