Eurozone construction downturn remains sharp in September
Construction activity across the eurozone remained firmly in contraction territory in September, with housebuilding suffering its steepest decline in more than a year and a half, according to a survey released on Tuesday.
The S&P Global eurozone construction PMI total activity Index edged up to 43.4 from 43.0 in August, but remained well below the 50.0 mark separating growth from contraction and below its long-run average of 47.1.
The downturn was broad-based across the eurozone’s three largest construction markets for a seventh successive month: France recorded the sharpest contraction with its PMI at 39.8, followed by Germany at 43.5, while Italy saw the smallest decline at 46.7.
Residential construction was the weakest-performing segment, with activity falling at the fastest rate since February 2025, driven by a particularly steep decline in Germany. Commercial construction and civil engineering also contracted, although at slower rates than in August.
New orders fell again, extending the downturn in demand to four and a half years, while firms cut jobs for the eighth straight month and reduced purchasing activity.
Cost pressures meanwhile intensified, with input price inflation accelerating for the first time since April and returning – outside the second-quarter spike following the outbreak of conflict in the Middle East – to its strongest level since late 2022.
Trevor Balchin, economics director at S&P Global Market Intelligence, said demand conditions remained weak, with construction firms “in retrenchment mode” as they cut jobs, subcontractor usage and purchases.
He added that the combination of weak demand and renewed inflationary pressure meant the outlook for activity over the coming year remained subdued.