Eurozone construction sector endures ‘sluggish’ start to the year as slowdown set to continue

The Eurozone construction sector endured a sluggish start to the year slowing to its softest expansion in six months in another blow for the bloc.

Weaker demand for building work in January led the downturn as purchasing activity rose at its slowest pace since October and job creation eased to a near-two-year low, according to the IHS Markit Purchasing Managers’ Index (PMI).

Read more: Eurozone services output declines to five-year lows

The French construction industry contracted for the first time in five months, while growth eased in Germany and Italy.

Across the euro area PMI fell to 50.6, close to stagnation, from 53.1 in December growth.

Germany’s “deterioration” was to blame for the first decline in commercial construction in the single currency bloc for two years, and housebuilding growth softened due to reduced activity in France.

“The Eurozone construction sector got off to a sluggish start in 2019, posting its softest activity expansion for six months,” IHS Markit economist Eliot Kerr said.

He added: “The broad-based downward trend in activity and new business suggests that industry growth may continue to stutter in the coming months.”

Employment numbers fell in Italy, while jobs growth slowed in both Germany and France as the bloc’s big three continued to struggle in January.

It comes after the euro area’s services sector output fell to five-and-a-half year lows and following disappointing manufacturing data.

Read more: Italy slips into recession as Eurozone growth disappoints

Italy officially slipped into recession at the end of 2018 after two quarters of contraction and Germany posted its slowest growth in five years.

Despite the weak data, Eurozone construction firms remained positive, recorded their highest level of optimism in six months.