Construction in Eurozone deep in depression

 
Ben Southwood
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ACTIVITY in the Eurozone construction industry sank further in June, Eurostat said yesterday.

Seasonally adjusted production in the bloc’s construction industry edged down 0.5 per cent compared to May, putting it 2.8 per cent down on the year, and almost a quarter lower than its pre-crisis peak.

Economic powerhouse Germany registered a surprise two per cent monthly dip, while besieged Spain saw a 1.3 per cent increase in construction output.

Construction looks unlikely to recover much over the next two years, said industry experts in their summer conference, selected results of which were released by German think-tank Ifo yesterday. Growth would be just one per cent in 2013, they predicted, following a completely flat 2012.

However, manufacturers in western German regions are planning to increase their 2012 investment some seven per cent over the €44bn (£34.6bn) spent in 2011, a separate survey, also released by the Ifo institute, showed.

Respondents plan to invest not only in expanded production, but also in adapting their “product palette” to changing demand. After adaptation, the next most common plan was replacement of capital.