Key Findings:

  • Sustained growth of output and new orders
  • Employment levels rise at quickest pace since February 2018
  • Input buying growth reaches 15-year high amid strong demand

The IHS Markit Eurozone Construction PMI® is compiled by IHS Markit 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 IHS Markit Eurozone Construction Total Activity Index fell only slightly from 56.6 in January to 56.3 in February, indicating a strong expansion in construction activity. Growth was commonly liked to stronger demand and increasing workloads. Growth of both commercial and civil engineering activity accelerated to the quickest since January 2018. House building remained the strongest monitored sub-sector in the eurozone, despite posting a slower rate of expansion.

Work undertaken on housing by eurozone construction firms increased at a strong pace in February. The expansion was the twelfth in consecutive months, though the pace of growth eased from January.

Eurozone commercial activity rose for the fifth month running in the latest survey period. The increase quickened from the previous survey period and was the sharpest since January 2018.

The upturn in civil engineering activity across the eurozone continued for a second month in a row in February. The rate of expansion accelerated from January and was the sharpest since January 2018.

February data pointed to a series record upturn in Italian construction activity, while German firms highlighted a second successive rise. Activity in France however, stagnated midway through the first quarter.

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

New business received by eurozone construction companies rose for the seventh successive month in February. The pace of expansion eased since January but remained sharp overall. Panellists often commented that stronger demand as the pandemic receded boosted orders.

Employment levels among eurozone constructors increased for the ninth month in a row during February. The pace of job creation was solid overall, and the quickest since February 2018.

Latest data indicated a further rise in buying activity among eurozone construction companies midway through the first quarter. The increase extended the current sequence of growth to 12 months and was the fastest since February 2007.

Supply chain disruptions remained widespread across the eurozone’s largest economies in February, as delivery times continued to lengthen rapidly. The overall extension in lead times quickened from that seen in January and remained among the most severe in the history of the series.

Average cost burdens faced by eurozone constructors increased at a substantial pace during February. The rate of inflation accelerated for the first time in four months and was close to record highs.

Eurozone construction companies signalled solid optimism regarding the year-ahead outlook for activity in February, though confidence eased from that seen in January.

Commenting on the latest results, Usamah Bhatti, Economist at IHS Markit, said, “Eurozone construction companies reported a sustained uptick in activity during February. Activity rose at a broadly similar pace to the recent high recorded in the previous survey period, as new orders expanded for the seventh month running. Employment levels increased at the sharpest rate for four years amid improved activity on site and upbeat confidence regarding future activity. While demand remains strong, severe price pressures and material shortages remain key headwinds for the eurozone construction sector. Notably, delays in sourcing and receiving raw materials intensified, adding to price pressures. In order to meet demand and protect against delays, companies increased purchasing activity at the sharpest rate for 15 years. By country, Italy saw a quicker rise in construction activity that was the fastest on record, while there was also a second successive increase in Germany. French firms noted a stagnation in overall construction activity, however, ending a sequence of four consecutive expansions.”

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