- Construction PMI 42.1 vs 41.4 prior.
Key findings:
- Construction activity falls across all monitored countries and sectors.
- Employment and purchases scaled back further.
- Expectations regarding outlook remain severely downbeat.
Comment:
Commenting on the PMI data, Dr Tariq Kamal Chaudhry, Economist at Hamburg Commercial Bank, said:
“The Eurozone's construction sector shows no signs of easing. While the HCOB PMI for the construction sector saw a slight uptick from the previous month, it remained firmly in contraction territory at 42.1 points in September. Among the subsectors, civil engineering saw the steepest month-on-month decline, though the residential real estate sector remains the most deeply entrenched in crisis.
Among the major Eurozone economies, the "red lantern" has passed from Germany to France, which has hit one of its lowest readings in a decade. Prices continue to rise. Despite the severe weakness in demand, input prices are still growing, although the pace of growth has slowed slightly compared to the previous month. The only positive sign is that subcontractor prices have now started to decline slightly.
There’s no room for optimism right now. Order intakes are shrinking alarmingly, and purchasing volumes are in the doldrums. It’s hardly surprising that the outlook for future activity remains pessimistic. Consequently, French construction firms are increasingly laying off staff. A monetary policy boost from the ECB would be more than welcome to revive the construction sector, but the ECB’s recent communications hardly seem to lift spirits in the industry."
