Slump in May construction adds to industrial woes across Europe

CONSTRUCTION output in the Eurozone dipped during May, according to new official figures – the worst drop in nearly a year and a half.

Production in the sector fell by 1.5 per cent from April, with Germany being the hardest hit of the bloc’s major countries. The powerhouse economy’s building output dropped by 4.9 per cent, the third month in which it has fallen.

Spain was the only one of the region’s large economies recording an upswing, with output up by one per cent from April to May. Over the year to May, this translates to an astonishing 42.4 per cent boost for the country.

The figures add to industrial data, which disappointed for May.

Inflation figures for the euro area were also released yesterday, confirming that prices rose by just 0.5 per cent in the year to June, the joint-lowest growth since 2009. French and German prices rose by slightly more, up by 0.6 and one per cent respectively.

In comparison, Italian CPI rose by just 0.2 per cent and Spanish prices were completely flat.

“It is very possible that 0.5 per cent could prove to be the low point for Eurozone consumer price inflation, partly because energy prices will likely see modest year-on-year increases going forward,” said IHS Global Insight’s Howard Archer.