Stock Market Impact: The S&P Global Eurozone Construction PMI Total Activity Index rose to 43.7 in May from 41.7 in April, remaining below the 50‑point threshold that signals expansion. The continued contraction signals pressure on Eurozone equity markets, particularly construction‑related stocks, though the slower pace may temper bearish sentiment.
Listed Companies and Sectors: All three major economies monitored – France, Italy and Germany – recorded declining construction activity. France experienced the steepest contraction, Italy the weakest decline, and Germany a robust but decelerating fall. Housing sub‑sector declined fastest, civil engineering slowest; all showed improved rates versus April. New orders fell sharply across the region, with France seeing the fastest drop, Germany’s downturn easing, and Italy posting the softest decline over the three‑month contraction period. Purchasing activity reduced in May but less sharply than April; France and Germany cut back at similar rates to the previous month, while Italy registered a slight increase – the first since February.
Supplier Delivery Times: Lead times lengthened to the greatest extent since December 2022. Germany recorded the worst deterioration in vendor performance in nearly four years. France and Italy also saw extended lead times, though less severe than in April.
Input Price Inflation: Cost inflation remained substantial across all three economies, easing from April’s three‑and‑a‑half‑year high. Germany led the increases, with robust inflation rates persisting in France and Italy.
Employment: Employment in the construction sector fell at a slightly slower pace in May. German job losses softened, while Italy recorded a twenty‑first consecutive monthly increase in employment. France saw another sharp decline in construction jobs.
Outlook: Firms maintained a pessimistic outlook for the coming year, marking three consecutive months of negative sentiment. The degree of pessimism softened due to less negative views in France and Germany. Italian firms showed renewed optimism, reaching the most positive level since February.
