Eurozone Construction PMI Rose to 44.3 in July, with Germany Remaining the Main Drag

(1) The Eurozone's S&P Global Construction PMI for July rose to 44.3 from June's 42.8. Although it remains in the deep contraction zone, the rate of decline is the slowest since March this year. (2) At the start of the third quarter, construction activity continued to shrink across the region, with all monitored sectors and the three largest economies recording declines. The downward pressure is particularly prominent in Germany, mainly due to sluggish demand and accelerated shrinkage in new orders. (3) Employment in the Eurozone construction sector decreased for the sixth consecutive month, but the pace of decline was the slowest since February, despite Germany experiencing a larger scale of layoffs. Cost pressures eased further, and energy-driven inflation, which soared to record highs after the Middle East conflict in April, has continued to cool down. (4) Looking ahead, businesses in the three major economies remain pessimistic, pushing industry confidence to its lowest in three months, with German companies being the most downbeat.