The eurozone construction sector has recorded a steep fall in activity as a result of inflationary pressures, the latest S&P Global Eurozone Construction PMI Total Activity Index has shown.
The April 2026 index fell to 41.7 in April, down from 44.6 in March, remaining well below the 50-point threshold that separates growth from contraction.
As the data showed, the eurozone construction sector recorded its sharpest decline in activity since August 2024, with the latest reading marking the fourth consecutive year of declining monthly construction activity across the eurozone.
Activity declined across all monitored countries and sectors, with France recording the steepest contraction, followed by Germany and Italy. Commercial construction posted the largest fall in activity, followed by residential construction, while civil engineering recorded a softer but still notable decline.
S&P Global said new business volumes also weakened further in April, falling at the fastest rate since November 2024. Construction firms linked the slowdown to rising costs, uncertainty and reluctance among clients to commit to infrastructure projects. France and Germany recorded particularly sharp declines in new orders, while Italy also saw a reduction in demand.
Input cost inflation
At the same time, input cost inflation accelerated to its highest level since October 2022, driven largely by higher raw material costs linked to the conflict in the Middle East. France and Germany recorded the fastest increases in construction input prices in more than three years, while Italian firms reported the strongest rise in costs in four years.
Employment in the sector declined for a third consecutive month, while construction firms reduced purchasing activity, extending a period of declining input buying that has continued since June 2022.
‘Sharp intensification’
“The start of the second quarter brought a sharp intensification of price pressures, largely in response to rising raw material costs in relation to the war in the Middle East,” commented Usamah Bhatti, economist at S&P Global Market Intelligence. “Higher expenses weighed heavily on the sector and contributed to the sharpest fall in activity levels since August 2024.
“Muted demand also played a factor in the malaise, as new work intakes fell to the greatest extent since November 2024. Falling demand was often related to rising price pressures, uncertainty and hesitancy among clients to commit to projects.
“The weakness across the sector weighed on the outlook for activity, with firms signalling the greatest degree of pessimism for 16 months. According to panel members, headwinds to activity included elevated levels of uncertainty and rising inflation, largely stemming from the war in the Middle East.” Read more here.
