November: +0.8% m/m, +0.2% y/y
October: -1.4% m/m (unrevised)
September: -1.4% m/m (revised from -1.5%)
August: -0.2% m/m (unrevised)
July: +1.7% m/m (unrevised)
—

PARIS (MNI) – Construction activity in the Eurozone recovered
somewhat in November, retracing a third of the slide since July, as an
upturn in building offset a further decline in civil engineering,
Eurostat said Wednesday.

The 0.8% monthly gain left activity 0.2% higher on the year but
only 2.5% above the nearly 15-year low during the cold December of 2010.
October-November results were down 2.0% from the 3Q average.

Building activity recovered 0.4% in November to stand 0.5% higher
on the year. Civil engineering was down 0.6% on the month and 2.6% below
the previous-year level. (The latest seasonally adjusted monthly
estimates are based on data from only seven of the Eurozone’s 17 member
states.)

With about a half-year lag, construction is now following other key
sectors into the cyclical downturn. Experience suggests it will also be
the last to recover, no doubt with a much greater lag.

Eurozone building permits recovered 0.8% in 3Q after a 4.6% drop in
2Q, separate Eurostat data show. However, sector sentiment has continued
to erode gradually since 3Q, reflecting builders’ weaker assessment of
activity and order books, the European Commission’s surveys show.

The monthly survey of the magazine Construction Europe signaled a
recovery in sector sentiment in December after a plunge in November.
“Compared to November’s starkly negative results, December’s survey has
seen sentiment moderate a little and to a large extent return to the
indecisive, directionless territory it was in for most of the late
summer and autumn,” said the editor.

In Germany, where prospects are the least gloomy, activity surged
by 4.5% in November after a 1.6% rebound in October to stand 9.9% higher
on the year. While home building should continue to attract investors
fleeing riskier assets, slowing economic activity will dampen commercial
construction and public stimulus measures have already been unwound.

The German construction association HDB expects total sales to grow
by just 1% this year in real terms after +6.5% last year, with
residential building up 6%, commercial construction up 3% and public
activity down 2.5%.

In France, activity recovered 0.8% in December after a 2.3% tumble
since August and was 1.0% higher on the year. However, construction
firms surveyed by Insee last month said activity remained weak and
expected no improvement in the coming months.

While residential and building starts in France are rising, the
sluggish pace of new permits suggests that the trend will be
short-lived. Last month, Insee revised down its projection for
construction activity in 4Q and now expects a 0.2% contraction that
would intensify somewhat in the first half of this year with quarterly
declines of 0.3%.

Spanish construction activity fell another 0.7% in November for a
cumulative slide of 2.8% since July and was 7.8% lower on the year.
Mortgage demand declined last year through 3Q and is expected to have
fallen further in 4Q, according to the Bank of Spain’s bank lending
survey. More than half a million homes are still looking for buyers,
despite the accelerating decline in prices.

As usual, no results for Italy were available for the reporting
month. Activity fell 2.1% in October after a 4.7% downturn in September
to stand 8.1% lower on the year. Istat’s surveys show a setback in
sentiment in both construction and civil engineering in December,
reflecting a slowdown in activity and orders after a pick-up in
November. But builders were hopeful that demand would recover in the
near term.

Elsewhere, construction in the Netherlands edged up 0.3% in
November to stand 0.6% lower on the year. Activity in Portugal bounced
back 2.9% after much steeper drops over the previous two months and was
12.2% lower on the year. Slovenia posted a 23.1% rebound that still left
activity 10.0% lower on the year. In Slovakia, activity slipped another
0.7% on the month and was 1.7% lower on the year.

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

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