January 27, 2023

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The construction sector in the eurozone is suffering from an “ongoing contraction”, according to the latest closely watched monthly survey.

The S&P Global Eurozone Construction PMI for December, released on Thursday, showed an overall activity index of 42.6, down from 43.6 in November. The numbers show less than 50 declining activity. December was the eighth consecutive month of contraction.

Activity fell in the largest economies of the 20-country bloc – Germany, France and Italy.

The figures, based on a survey of purchasing managers at 650 construction companies, are the latest sign of declining activity in European economies affected by the war in Ukraine and a resulting rise in energy and other costs.

The results of the study said: “The latest reading was an indication of the continuing contraction in the levels of construction activity in the euro area.”

The sector ended 2022 on a “negative note,” said Laura Denman, an economist at S&P Global Market Intelligence, with a “sharp drop” in construction activity.

The last three months of 2022 witnessed the index’s worst quarterly performance since the April-June quarter of 2020, when the numbers were affected by the effects of the coronavirus pandemic.

Excluding the effects of the pandemic, total activity fell at the sharpest rate since March 2013 and new orders at the fastest rate since September 2014.

“The December data indicates that companies expect continued challenging economic conditions into the future,” Denman said.

She added, however, that there is “continued mitigation” in both cost and supply pressures.

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