Measures to limit the spread of the coronavirus disease severely impacted the eurozone construction sector in March, with construction activity falling sharply as new orders slumped.
The downturn in the sector was accompanied by job shedding.
Input purchases plummeted as construction work fell, with firms also facing great difficulty securing inputs due to supply chain disruptions.
Delivery times lengthened at a pace not seen in the 20-year survey history.
Business expectations turned negative for the first time for nearly four-and-a-half years.
The IHS Markit Eurozone Construction PMI® plunged from 52.5 in February to 33.5 in March, pointing to the steepest decline in construction activity across the currency area since February 2009 during the global financial crisis.
The downturn in construction activity was broad-based across the eurozone, with Italy recording the sharpest decline.
Germany registered the slowest contraction of construction output, albeit still marked overall.
At the sub-sector level, the overall decline was led by a further slump in civil engineering work, in which the rate of contraction was the fastest in eight years, while sharp decreases in home building and commercial construction projects also contributed.
With construction activity contracting sharply in March, eurozone construction firms cut their staff numbers for the first time since January 2017.
Moreover, the rate of job shedding was the fastest for a decade and steep overall.
Across the euro area, the drop in construction employment was quickest in Italy, followed by France.
The downturn in construction activity also saw firms scaling back their purchases of raw materials and other building inputs for the first time since October 2016.
Moreover, the decline in purchasing activity was the steepest recorded in the survey's 20-year history.
At the national level, the result was predominantly driven by a record fall in Italy, with France also reporting a severe decline.
Despite the sharp reduction of input purchases, suppliers' delivery times in the eurozone construction sector lengthened further in March, and at a rate not seen since the survey started in January 2000.
Falling activity occurred concurrently with a slump in demand.
New business plunged in March, falling at the fastest rate for over 11 years.
National data showed a broadbased decline across the eurozone, led by severe falls in Italy and France.
On the cost front, input prices faced by eurozone construction firms continued to rise in March.
However, the rate of inflation eased to the slowest for three-and-a-half years.
National data revealed slower increases in all monitored eurozone economies, with France and Italy reporting the slowest pace of inflation. ■