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Eurozone construction tanks despite services boom

12/11/2025, 14:12

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Eurozone construction is in freefall. October’s PMI reading of 44.0 marks the steepest activity drop since March, with Germany’s sector drowning despite a €166bn infrastructure commitment and France posting its worst demand since the pandemic.

Eurozone construction activity plunged in October, recording its sharpest drop since March, according to the latest Hamburg Commercial Bank (HCOB) Purchasing Managers’ Index from S&P Global Market Intelligence.

The HCOB Eurozone Construction PMI Total Activity Index fell to 44.0 from September’s 46.0, with readings below 50.0 indicating contraction. The decline was driven by sharper reductions in new orders across housing and civil engineering, while commercial construction also weakened.

Germany’s construction sector is “sinking deeper into the proverbial swamp,” said HCOB chief economist Dr. Cyrus de la Rubia. This despite Chancellor Friedrich Merz’s government committing €166bn over five years in June to address crumbling transport infrastructure. After two months of growth, civil engineering activity has “taken a sharp dive.”

France saw its steepest demand decline since May 2020, hampered by political paralysis and planned austerity measures. Only Italy managed a second consecutive monthly rise in new orders.

Construction firms shed jobs for the 32nd straight month, with October marking the sharpest reduction since February as lower order inflows prompted further cuts.

The sector’s weakness stands in stark contrast to the broader eurozone economy, which expanded at its fastest pace since May 2023, driven by services sector strength. The divergence suggests construction may be weathering the final challenges before a potential 2026 recovery.