Euro area construction output falls again in August

Euro area construction output dropped again in August. The overall output fell for the second straight month and by 0.5 percent on a sequential basis. Building work dropped 0.3 percent, while civil engineering dropped 1.1 percent. The softness was mainly driven by Germany where output dropped 1.8 percent sequentially, while there were modest rises in France and Spain of 0.2 percent and 0.5 percent.

However, the overall activity in the sector was still 2.5 percent up year-on-year, and on average in July and August construction output 0.3 percent higher than the average in second quarter.

“Moreover, with confidence among construction firms having risen to a series high, and order books also reportedly at historically high levels, we would expect to see a rebound in activity in September to ensure that the sector once again provided modest support to euro area GDP growth in Q3”, stated Daiwa Capital Research in a report.

At 18:00 GMT the FxWirePro's Hourly Strength Index of Euro was highly bearish at -112.774, while the FxWirePro's Hourly Strength Index of US Dollar was highly bullish at 123.302. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex