That鈥檚 according to the latest monthly survey of Eurozone construction buyers produced by S&P Global and the Hamburg Commercial Bank (HCOB).

The HCOB Eurozone Construction PMI Total Activity Index rose from 42.9 in December to 45.4 in January, indicating a sharp, albeit softer contraction in activity across the euro area construction sector (any score below 50.0 signifies a contraction in activity).

The index has charted a decline in construction activity in the Eurozone for 33 straight months but January 2025 saw the softest contraction since February 2023.

The continued contraction was down to negative output trends in both Germany and France. Italian companies saw activity rise for the second successive month, but the rate of growth was only marginal.

Housing was once again the sub-sector of construction to see the most pronounced decrease in activity levels, although commercial and civil engineering activity also fell, albeit at a slower rate than in December 2024.

Image: S&P Global/HCOB

New orders across the Eurozone continued to decline at around the same rate as in December. German construction buyers reported the sharpest drop in new orders in January 2025 since May 2024. The downturn in new orders in France eased and Italian companies recorded sustained growth in new orders, albeit at a slower rate.

Dr Tariq Kamal Chaudhry, economist at Hamburg Commercial Bank offered a gloomy assessment of the situation, calling it 鈥渂leak鈥�, with business expectations at 鈥渞ock bottom鈥�.

He said, 鈥淭he Eurozone is struggling to get the construction sector moving. The HCOB Construction Sector PMI improved slightly in January but remains firmly in contraction territory. Among the major economies, Italy is pulling the index up, while Germany and France are dragging it down. The European Central Bank (ECB) is unlikely to be pleased with the situation, having sent signals of caution in January, with President Christine Lagarde warning of a potential resurgence of inflation driven by the services sector. HCOB Economics therefore expects only two more rate cuts in the first half of the year, which is likely to negatively impact the EU construction sector, as futures markets had anticipated more significant rate cuts last year.

鈥淭he crisis is profound. All subsectors are contracting: residential construction, commercial construction, and civil engineering. The only advantage of the current situation is that price growth, both for inputs and subcontractors, is slow.鈥�