Key Findings:

  • Fastest decline in new work since May 2020
  • Weakest 12-month outlook since April 2020
  • Input price inflation accelerates further from July’s 17-month low

The S&P Global Eurozone Construction PMI® is compiled by S&P Global from responses to questionnaires sent to purchasing managers in a panel of around 650 construction firms in the eurozone. The headline figure is the Total Activity Index, which tracks changes in the total volume of construction activity compared with one month previously.

The S&P Global Eurozone Construction Total Activity Index was below the no-change mark of 50.0 for the fifth successive month in September, at 45.3, signalling a sharp decline that was nonetheless slightly softer than in August (44.2). Germany (41.8) posted a steeper contraction, while rates of decline eased in both Italy (46.7) and France (49.1).

Broken down by sector, housing activity fell at the fastest rate since May 2020. Civil engineering posted a slightly softer fall than August’s 18-month record, while commercial activity registered the slowest decline in four months.

New orders placed with eurozone construction companies declined for the sixth successive month in September. Furthermore, the rate of contraction quickened for the fifth month running to the sharpest since May 2020. Data broken down by country showed that a much a steeper reduction in Germany drove the overall acceleration, offsetting softer falls in both France and Italy.

Eurozone construction companies cut workforce numbers for the sixth successive month in September. Moreover, the rate of job shedding was the quickest since May 2020.

Employment levels fell across all three nations for the second month running. The steepest pace of reduction was recorded at German constructors, and the weakest at their French counterparts.

September data revealed a worsening degree of pessimism among eurozone construction companies regarding the year-ahead outlook for business activity. Companies were at their most downbeat since the first COVID-19 lockdown in April 2020, reflecting the growing risk of recession in the wider economy. German construction firms were at their most pessimistic since March 2020, while their French counterparts were less downbeat than in August and Italian firms were modestly optimistic.

The Exporting from the UK section of the Construct UK Directory includes
– International Construction Exhibitions – UK Government Support for Exhibiting Overseas – Identifying Suitable Markets – Agent or Distributor – International Project Lead Sources

Purchasing activity at eurozone construction firms fell for the fourth consecutive month in September. The rate of reduction eased from August’s 27-month record, but was solid nonetheless. Input buying fell in Germany and Italy, with the former posting the steeper decline. French construction firms raised their purchases following a brief fall in August.

As has been the case since late-2012, the performance of suppliers to eurozone construction firms continued to worsen in September. Pressure on lead times in the latest period was greater than in August but the second-weakest since February 2021. Delays were most prevalent in Italy, followed by France.

The rate of input cost inflation at eurozone construction firms accelerated further from July’s 17-month low to a three-month high in September. Cost pressures remained well above the long-run series average, reflecting persistent supply shortages and rising energy and transport costs.

French construction firms again registered the fastest rate of input price inflation, followed by Germany and Italy respectively.

The use of subcontractors at eurozone construction firms fell for the sixth month running in September. Moreover, the rate of decline was the sharpest since January 2021. There was a notably marked fall in Germany, contrasting with no change in Italy. Meanwhile, subcontractor availability deteriorated markedly. Rates charged by subcontractors increased at a faster rate than in August, albeit the secondweakest in 16 months.

Commenting on the latest results, Trevor Balchin, Economics Director at S&P Global Market Intelligence, said, “September data rounded off a very weak third quarter for the eurozone construction sector. Outside of the pandemic, the rate of decline in activity in the third quarter was the strongest since the fourth quarter of 2014. Activity fell sharply again in September, with Germany posting a notably steep rate of contraction. The overall pace of decline eased due to slower falls in France and Italy, although this masked a worsening outlook as both new orders and firms’ 12-month expectations sank deeper into negative territory.

“The weak demand environment was accompanied by stronger cost pressures in September, as the rate of input price inflation accelerated to a three-month high and remained among the sharpest in the series history.”

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