May data pointed to a second successive monthly increase in activity across the French construction sector, although the rate of growth eased from April.
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The latest expansion was supported by the first rise in new orders for three months and a continued increase in employment.
Meanwhile, purchasing activity rose for the nineteenth month in a row and business optimism reached a two-year high.
On the cost front, input prices continued to increase markedly, despite the rate of inflation easing to the softest since last August.
The headline France Construction Purchasing Managers’ Index (PMI) recorded 50.3 in May, down from 50.8 in April.
The reading signalled a further rise in construction activity in France, but one that was slightly slower than in the previous survey period and only marginal overall.
At the sub-sector level, the continued increase in total activity was underpinned by housing, where firms recorded growth for the second month in a row.
That said, the rate of expansion in home building was softer than in April and only modest overall.
Meanwhile, commercial activity stabilised after three consecutive monthly contractions, but work on civil engineering projects fell at the fastest pace for four months.
New orders placed with French construction firms rose during May.
Although the increase was only marginal overall, it was the first for three months.
Anecdotal evidence pointed to an improvement in demand from both the public and the private sector.
Amid the rise in new business, French building companies increased their staff numbers midway through the second quarter, extending the current sequence of workforce expansion to two years.
The rate of job creation eased slightly from April, remaining moderate overall.
Meanwhile, firms maintained their optimism towards the business outlook in May, supported by expectations for improved demand conditions.
Notably, the degree of confidence improved to its strongest for two years.
Purchases of building materials and products in France's construction sector continued to increase during May.
Input buying has now risen in each month for just over one-and-a-half years.
Although the pace of growth accelerated from April, it remained only modest overall.
Finally, input prices faced by French building firms continued to rise strongly midway through the second quarter.
Panellists often noted higher costs for oil-related products, and raw materials such as copper and steel.
That said, the rate of inflation eased to the softest since August 2018. ■