Eurozone construction strengthens as Germany returns to growth

7th Jan 2026 08:44

(Sharecast News) - The Eurozone's hard-pressed construction sector strengthened marginally in December, official data showed on Wednesday, following renewed growth in Germany.

The HCOB Eurozone construction PMI total activity index rose to 47.4 in December from 45.4 in November. It was the softest contraction since February 2023. However, it has now been below the neutral 50.0 benchmark for 44 consecutive months.

A reading above 50.0 indicates growth, while one below it suggests contraction.

Driving December's uplift was renewed expansion in Germany, Europe's biggest economy. Its PMI total activity index jumped to 50.3 from 45.2 in November, the first time it has moved into growth territory since March 2022.

Growth was led by the civil engineering sector, which posted the fastest increase in activity for nearly 15 years. That helped offset weaker performances in France and Italy.

Overall, Eurozone housing activity decreased although the rate of contraction slowed sharply, and was the least pronounced since May 2022. The rate of decline in commercial activity also softened.

Input costs, however, rose sharply, the fastest in six months.

Cyrus de la Rubia, chief economist at Hamburg Commercial Bank, said: "Toward the end of last year, things looked brighter for the Eurozone's construction sector.

"The big question is if this more positive tone in housing will carry over into the new year. Supporting factors include Germany's infrastructure programme, which seems to be gaining traction, and low short-term interest rates.

"On the flip side, accelerated rising construction costs, relatively high long-term rates and renewed weakness in incoming orders are acting as brakes."

Data for the Eurozone construction PMI were collected between 4 and 23 December. Surveys were sent to purchasing managers on a panel of around 650 construction firms in Germany, France, Italy and Ireland.