January: +1.8% m/m, -4.5% y/y
December: -2.0% m/m (revised from -1.8%)
November: -0.3% m/m (revised from -0.9%)
October: -0.5% m/m (revised from +0.1%)
September: -1.5% m/m (revised from -0.6%)
—

PARIS (MNI) – Construction activity in the Eurozone bounced back
1.8% in January, retracing most of the drop in December, Eurostat said
Thursday.

Activity in January was 0.2% above the 4Q average but still 4.5%
below the previous year’s depressed levels and down more than 20% from
pre-crisis peaks.

Building activity alone, which had fallen 1.0% in December,
recovered by 1.1%, giving a 3.1% decline on the year. Civil engineering
rebounded 8.0% from an 8.8% plunge to stand 12.5% lower on the year.

(The latest seasonally adjusted monthly estimates are based on data
from only six of the Eurozone’s 17 member states.)

Leading indicators point to a further recovery in the near term,
but mainly as a catch-up effect after the harsh winter. Builders polled
by the European Commission in February said recent activity had
rebounded sharply, boosting the index slightly above the recent high in
November. Nearly all countries contributed, led by a spectacular
35.8-point spike in Germany.

In the February survey of the magazine Construction Europe, nearly
a third of respondents reported a pick-up in activity after a downturn
in January. Close to half still expected activity to be higher in a
year’s time.

However, any upswing is likely to prove short-lived. Activity has
been on the slide for over three years now, with occasional upturns
which merely recoup part of previous losses.

Despite some improvement orders in February, sector sentiment
remained below average in most Eurozone countries, especially in Spain,
the Netherlands, Portugal, Greece, Cyprus and Slovenia. Only in Germany,
Austria and Finland were builders relatively optimistic.

New construction orders in the Eurozone recovered nearly 3% in
seasonally adjusted terms in 4Q, retracing half the downturn in 3Q,
separate Eurostat data show. However, available data on building permits
point to a setback in 4Q.

Among the larger countries, prospects are brightest in Germany,
where activity bounced back 36.3% in January from December’s 24.2%
plunge, giving an impressive 55.4% rise on the year. This largely
reflects the base effects of a later recovery last year from winter’s
slide.

Germany builders polled by the Ifo institute reported a further
pick-up in February, lifting the current conditions index to a fresh
series high and capacity utilization almost back to the 17-year peak
seen in November. Medium-term expectations remained close to January’s
record high.

In France, where activity had picked up somewhat in 2Q and 3Q,
January brought a 7.9% upturn after December’s 5.9% drop, giving a 5.3%
rise on the year. Building starts and permits are recovering very
slowly, both for housing and commercial construction. Firms surveyed by
Insee in February said recent activity had picked up but remained
neutral on prospects for the near term.

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 43.2% in January testifies to the
severity of the ongoing adjustment since the burst of the real estate
bubble. Firms polled by the Commission in February said the pace of
contraction had slowed in recent months but their assessment of order
books was anything but promising.

Elsewhere, construction in the Netherlands rose 3.1% in January and
was 5.8% higher on the year. Portugal sustained a further 1.3% monthly
decline that left activity 8.6% lower on the year. Building in Slovenia
was up 3.8% on the month but 17.1% lower on the year. Slovakia posted
declines of 2.0% on the month and 2.3% on the year.

–Paris newsroom +331 4271 5540; e-mail: stephen@marketnews.com

[TOPICS: M$X$$$,M$XDS$]