December: -1.8% m/m, -12.0% y/y
November: -0.9% m/m (unrevised)
October: +0.1% m/m (revised from +0.3%)
September: -1.6% m/m (unrevised)
—

FRANKFURT (MNI) – Construction output in the Eurozone continued to
lose ground in December, falling to its lowest level since early 1996,
as all reporting countries except Slovenia suffered significant
declines, Eurostat reported on Thursday.

On the month, production in the sector fell 1.8%, deepening
November’s dip and widening the annual shortfall to 12.0%. Taking
October, November and December together, output was down 2.3% compared
to the third quarter, which in turn was 3.5% lower than 2Q.

Over 2010 as a whole, construction activity slid 7.4% compared to
2009.

Building activity fell for the second consecutive month, slipping
0.9% compared to November and 8.9% on the year. The drop in civil
engineering was much more severe, however, falling 10.6% on the month
for an annual change of -26.2%.

After harsh winter weather put a damper on activity in late
December and early January, morale within the industry saw a strong rise
this month, as a growing proportion of firms reported an improvement in
monthly activity, Construction Europe magazine said.

Citing its sentiment barometer, the magazine also noted the
continued optimism regarding the one-year outlook for the sector,
highlighting that “these high levels of future confidence have been a
feature of the CE Barometer for more than a year now.”

The latest European Commission sentiment survey appeared more bleak
for the near term, as respondents revised down their new orders
assessment in January to its lowest level since September.

Construction activity in Germany fell off a cliff, as production
was down by a record 24.1% between November and December to its lowest
point ever. As a result, the annual decline widened to 23.6%. On the
quarter, output in 4Q waas down 6.4% following 3Q’s 0.4% slide.

Respondents in the latest purchasing managers index (PMI) reported
a strong rise in construction output last month, lifting the
construction PMI figure to a near four-year high of 55.5. New work
levels also strengthened in January, in part due to weather-related
delays during the previous period, the PMI report added.

Construction firms polled in the latest Ifo survey were also more
satisfied regarding their present business situation in January and
expected “a clear improvement in business in the coming months.”

French construction production fell 4.1% on the month, deepening
November’s decline, to its lowest level since May 1997. On the year,
production was 9.4% lower.

While harsh weather no doubt took its toll on infrastructure
projects, housing starts continued to recover in seasonally adjusted
terms in December, according to the Ministry for Development.

Builders polled by Insee in January reported a further decline in
recent activity, but expected a flatter slide in the months ahead.
Still, the statistics institute’s sector cyclical indicator remained
deep in the red zone, still pointing to “unfavourable” conditions ahead.

While Spanish monthly data is not provided, annual figures show
that construction activity in Spain fell 19.8% versus November’s -30.8%
y/y slide.

The latest Commission survey noted that sentiment in the Spanish
construction sector continued to weaken in January, slipping to its
lowest point in nearly 18 years. While respondents noted a mild
improvement in activity trends compared to preceeding months, they
downwardly assessed their order books to their lowest level since
mid-1993.

In other parts of the Eurozone, activity in the Slovenian
construction sector rebounded 5.3% m/m, though still resulting in an
annual drop of -11.4%.

— Frankfurt bureau: +49 69 720 142; email: frankfurt@marketnews.com —

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