Eurozone Construction Slumps Amid Inflation and Middle East Tensions
The Eurozone construction industry experienced a sharp decline in new orders in August, as firms faced challenges related to inflation and the war in the Middle East. The S&P Global Eurozone Construction Purchasing Managers' Index (PMI) reported a score of 43.0, down from 44.3 in July.
The decline was led by France, which experienced its fastest contraction since May 2020, while Italian companies saw their fastest decline in four years. German companies, however, registered the softest fall to date.
Residential construction was the sector that saw the sharpest decrease, followed by commercial construction, while civil engineering activity saw a softer decline.
Usamah Bhatti, economist at S&P Global Market Intelligence, noted that new business intakes fell at the quickest pace in four months, with the decline broad-based across the monitored nations. He also stated that firms are signalling pessimism regarding the year ahead due to inflationary concerns and the war in the Middle East.