Eurozone Construction Downturn Worsens

The HCOB Eurozone Construction PMI fell to 45.3 in January from 47.4 in December, as demand remained weak and new orders declined. All three major economies reported falling output, with the steepest drop in France and the mildest in Italy, while Germany returned to a sharp decline after a brief rise in December. Housing and commercial construction both weakened, with commercial activity posting its biggest fall since November 2024, although civil engineering edged slightly higher. New orders continued to drop across the region, particularly in France and Germany, prompting firms to cut purchasing activity again. Input costs rose at the fastest pace since April 2023, driven by higher operating expenses across Italy, France and Germany. Despite weak demand, employment rose for the first time since February 2023 as firms in Germany and Italy added staff, while overall sentiment remained pessimistic though slightly less negative than in recent months.