Eurozone construction activity slows in April

The construction sector in the euro zone weakened in April, official data showed on Monday.

According to the first estimates published by Eurostat, the statistics office of the European Union, seasonally adjusted production in the construction sector fell 1.1%, down from the marginal rise of 0.1% recorded in March. The March figure has been revised upwards by 0.0%.

In the EU as a whole, production fell by 1.2% in April and increased by 0.1% in March.

Year-on-year construction production rose by 3.0% in both the euro area and the EU in April.

Driving the fall was a 5.5% drop in civil engineering activity in the Eurozone, which more than reversed the 2.0% rise in the previous month. Building construction rose 0.1%.

In the EU, civil engineering fell by 6.1% and building by 0.2%.

Among individual countries, construction activity rose in France and Spain, but fell sharply in Germany, the bloc’s biggest economy, and Italy. In Germany, activity fell by 2.1% over one month, the third consecutive monthly decline.

Melanie Debono, Senior Economist Europe at Macroeconomics Hall of Famesaid: “The postponement, if the level of construction activity remains at April’s level throughout the second quarter, implies that construction will dampen GDP growth this quarter.

“This implies that activity will fall 0.7% quarter-on-quarter, after rising 3.7% in the first quarter as a whole. We think it will probably fare slightly worse, perhaps down 1% to 1.5%.”

The construction industry faces continued shortages of raw materials and labour, supply chain delays and soaring input prices, much of which has been exacerbated by the war in Ukraine. The last S&P Global The Construction Purchasing Managers’ Index, released in May, showed that construction activity fell in May in the euro zone for the first time in nine months.

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