October: flat m/m, -6.8% y/y
September: -1.6% m/m (revised from -2.1%)
August: -0.4% m/m (unrevised)
July: -3.5% m/m (unrevised)
—
PARIS (MNI) – Construction activity in the Eurozone stabilized in
October after three months of decline, as a rebound in Germany offset a
contraction in most other reporting countries, Eurostat said Friday.
Activity was 6.8% below the previous year’s depressed levels and
down more than 22% from pre-crisis peaks.
Building activity alone was also unchanged on the month and 6.6%
lower on the year. Civil engineering recovered 0.4% on the month and was
8.7% below the previous-year level.
(The latest seasonally adjusted monthly estimates are based on data
from only six of the Eurozone’s 16 member states.)
Activity has been on a downward trend for over three years now. The
1.7% recovery in 2Q was largely a catch-up after the harsh weather in
1Q, when output plunged 4.2%. The contraction resumed in 3Q with a 3.4%
drop.
Despite low borrowing costs, sector activity appears unlikely to
regain dynamism soon. Leading indicators suggest that activity may be
bottoming out in most countries. But the unwinding of public stimulus
programs and the ongoing contraction in Spain and Ireland will continue
to weigh on Eurozone results next year.
New construction orders fell back nearly 10% in seasonally adjusted
terms in 3Q, retracing almost half the 2Q rebound from the trough in 1Q,
separate Eurostat data show. However, building permits recovered
slightly in 2Q from a cyclical low in 1Q, and available data for 3Q show
a marked rise in Germany (+11%) and France (+8%).
Sector sentiment has also been on an upward trend since June, but
it eroded somewhat in November due to the steep slide in Spain, the
European Commission’s survey showed. Builders’ assessment of order books
was somewhat less negative in all reporting countries except for
Slovakia and Spain, where it deteriorated abruptly.
The November sector survey of the magazine Construction Europe
pointed to a modest improvement in recent activity from October’s low
level and considerably brighter expectations at the 12-month horizon.
The French national statistics institute on Thursday forecast a
pick-up of activity in France and Germany next year, while projecting
Spain and Ireland to remain in the doldrums.
German construction activity posted a 1.3% upturn in October for a
5.8% gain on the year. Builders surveyed by Ifo reported a rise to a
fresh cyclical high in November but a steep setback in December, perhaps
reflecting the early onset of icy temperatures.
In France, activity slipped another 0.7% on the month after a 0.2%
downturn in September and was 2.0% was lower on the year. Housing starts
have begun to recover but remain slightly below previous-year levels.
Commercial building starts are still down over 30% on the year, but
firms’ near-term outlook has recovered considerably, according to
Insee’s surveys. Overall construction prospects rose to a two-year high
in December.
Eurostat said it has stopped publishing adjusted monthly data from
Spain, “due to the volatility of their current working day adjusted data
series.” The annual decline of 34.1% in October testifies to the
severity of the ongoing adjustment since the burst of the real estate
bubble. Firms polled by the Commission in November said recent activity
had fallen off sharply and their assessment of orders on hand was much
bleaker.
Elsewhere, activity in the Netherlands recovered 0.3% in October
after four months of decline and was 6.7% lower on the year. Portugal
sustained a 6.6% monthly dive after 4.5% downturn in September and was
9.3% lower on the year. Activity in Slovenia dropped 1.3% on month, for
a 17.6% decline on the year. Across the border, Slovakia posted a 2.0%
recovery in October, giving a 5.3% annual gain.
–Paris newsroom +331 4271 5540; e-mail: stephen@marketnews.com
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