Eurozone Construction Output Contracts the Least Since 2023

The HCOB Eurozone Construction PMI jumped to 46.7 in August 2025, from a five-month low of 44.7 in the previous month. This marked the highest reading since February 2023, as the decline in residential construction was the slowest in four months, while civil engineering activity returned to growth. In contrast, commercial construction saw its sharpest contraction since November 2024. Regionally, France experienced the mildest decline, whereas the rate of contraction in Germany and Italy intensified marginally. New orders continued to fall for the 41st straight month, though the pace of decline eased compared to July. As a result, employment in the construction sector continued to fall—a trend now extending over two and a half years. On the cost front, input price inflation eased to a four-month low and remained well below the long-run average. Finally, business sentiment remained deeply pessimistic, with firms continuing to express growing concerns about the year-ahead outlook.