Construction activity declines in UK and Eurozone

Construction activity across the United Kingdom and the Eurozone showed significant contraction in August, according to S&P Global data.

In the United Kingdom, the construction Purchasing Managers Index (PMI) fell to 44.3 in August, down from 44.7 in July. This marks the 20th consecutive month of contraction for the sector. The decline is primarily driven by weakness in the residential construction segment, which continues to weigh on infrastructure and real estate investment. Factors contributing to this downturn include weak terminal demand, low business and consumer confidence, and geopolitical uncertainties in the Middle East.

Across the Eurozone, the construction PMI dropped to 43.0 from 44.3 in July, marking 52 consecutive months of contraction. The decline was led by a sharp drop in French construction activity, which hit its lowest level since May 2020 at 37.3. Italy also saw a significant slowdown, with its index falling to 41.7, its lowest since August 2022. While Germany saw a slight increase to 48.7, the overall regional outlook remains pessimistic, characterized by declining new orders, reduced employment, and a continuous monthly decrease in input purchases since June 2022.