(Alliance News) - The decline in the eurozone's construction activity deteriorated in July amid weak demand, a fall in new orders and job cuts, data published by S&P Global showed Wednesday.

The eurozone construction purchasing managers' total activity index fell to 44.7 points in July from 45.2 in June. Falling further from the neutral 50-point mark separating growth from contraction, it indicates the pace of decline sped up in July.

The decline was mostly attributed to weak demand conditions amid a sharp drop in new orders.

Notably, pessimism regarding future activity was the worst since February.

S&P Global said: "In response to declining new order inflows, construction firms in the eurozone reduced their payroll numbers in July. Job shedding has been observed on a monthly basis since March 2023, with the latest round of decrease in headcounts solid overall."

Norman Liebke, economist at Hamburg Commercial Bank, said: "All three sectors—residential, commercial, and civil engineering—contracted in July. Even though residential and commercial construction are no longer shrinking as sharply as they did in June, the recession is clearly visible. Civil engineering is not trending any better. The outlook for European construction companies remains weak. New orders continue to decline and fell by nearly four index points in July, and the employment situation remains tense. The construction companies themselves expect weak activity over the coming twelve months, with only the Italian companies remaining optimistic."

The construction PMI features a panel of 650 construction firms in the eurozone, with responses collected between July 10 and 31.

By Tom Budszus, Alliance News slot editor

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