International Economic
Eurozone construction downturn deepens as cost pressures surge
By Benjamin Chiou
Date: Wednesday 08 Apr 2026
(Sharecast News) - Construction activity across the eurozone contracted at the steepest rate in five months in March, according to S&P Global data on Wednesday, as a surge in input price pressures pushed cost inflation to a 40-month high.
The S&P Global eurozone construction purchasing managers' index fell to 44.6 in March from 46.0 in February, marking the sharpest decline in activity - marked by any figure below 50 - since October 2025.
The regional PMI has now remained below the neutral mark for the past 47 months.
Firms across the sector pointed to surging energy prices behind the acceleration of input price pressures, which rose to their most severe since November 2022.
Ongoing delays to new construction activity weighed heavily on demand conditions, with the three largest eurozone economies - Germany, France and Italy - all registering declines in output over the month.
Commercial construction activity registered the steepest decline across the industry, followed by residential construction, while the fall in civil engineering eased slightly.
Optimism levels also pulled back as a result of the Iran conflict, having briefly strengthened to a four-year high in February.
"The construction sector in the eurozone fell deeper into contraction territory at the end of the first quarter," said Usamah Bhatti, economist at S&P Global Market Intelligence.
"March data also revealed a surge in cost pressures, which weighed on both new work and activity. Input prices rose at the strongest rate since November 2022, with the war in the Middle East a strong factor behind a steep rise in energy prices."
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