Euro area construction rises weakly in December

Euro area construction outcome came in soft at the end of 2018. The output data released today implied that growth continued to be soft in the sector. In particular, output dropped for the second month out of the last three in December and by 0.4 percent sequentially, due to a 0.7 percent fall in building construction.

Therefore, over the fourth quarter as a whole, output rose just 0.3 percent, after a 0.4 percent contraction in the third quarter. Largely thanks to a solid construction outturns in Franc and Spain that the softness was comparatively contained in December. But while construction orders in Germany have kept a stable upward trend in the recent months, output in the sector continued to fall, dropping in December for the third straight month and by over 4 percent sequentially.

And it was largely thanks to strong construction outturns in France (1.8%M/M) and Spain (2.6%M/M) that the weakness was relatively contained in December, noted Daiwa Capital Market Research in a report. But while construction orders in Germany have maintained a steady upward trend over recent months, output in the sector continued to disappoint, dropping in December for the third consecutive month and by more than 4%M/M.