FX.co ★ Eurozone Construction Output Contracts the Least Since 2023

In August 2025, the HCOB Eurozone Construction PMI rose to 46.7, improving from July's five-month low of 44.7. This upward movement signifies the highest index level since February 2023, driven by a deceleration in the decline of residential construction activities, which hit its slowest pace in four months. Moreover, civil engineering returned to positive growth. Conversely, commercial construction experienced its steepest decline since November 2024. Examining regional performance, France had the smallest drop, while Germany and Italy faced slightly increased contraction rates. Although new orders continued to diminish for the 41st month in succession, the rate of decline showed signs of slowing compared to the previous month. Consequently, employment in the construction sector has been on a downward trajectory for over two and a half years. On the financial side, input cost inflation decreased for the fourth consecutive month, remaining significantly below the long-term average. Finally, business sentiment stayed deeply pessimistic, with firms increasingly anxious about the economic outlook for the coming year.