HCOB Construction PMI

The HCOB Eurozone Construction PMI (Purchasing Managers' Index, a survey gauge of business conditions) tracks monthly change in eurozone building activity. Compiled by S&P Global and sponsored by Hamburg Commercial Bank (HCOB), it surveys around 650 firms in Germany, France, Italy and Ireland. The panel is stratified by sector and workforce size based on contributions to GDP, with data collected since January 2000.

It measures only month on month direction, not total output volume, and the eurozone figure is weighted rather than simply averaged. It excludes manufacturing, services and consumer activity.

Responses are collected in the second half of each reference month. Results appear in the first week of the following month, on a weekday that varies. Each answer compares activity with the previous month and stays under embargo until about 09:30 Frankfurt time, CET in winter and CEST in summer.

Each release includes German, French and Italian readings for the same month, plus the HCOB Pulse of the Euro Area note and charts. A reading above 50 means growth from the prior month, below 50 means contraction, and 50 means no change. Survey answers are never revised after publication, though seasonal adjustment factors may be revised when needed.

The headline moves with building segments, demand, jobs, and costs.

• Total activity: the headline index, tracking monthly change in overall construction volume.
• Housing: tracks work on residential projects across the four countries.
• Commercial activity: tracks work on commercial buildings from month to month.
• Civil engineering: tracks infrastructure and public works projects.
• New orders and employment: track incoming demand and staffing; weak orders often come before output and job cuts.
• Costs, buying, suppliers and outlook: track input prices, buying activity, delivery times, subcontractor availability, use, quality and rates, and 12-month expectations.

In November 2023 the Total Activity Index rose to 43.4 from 42.7 in October 2023, still a sharp contraction since it stayed below 50. Germany fell at its sharpest pace in over three-and-a-half years and France also shrank, while Italy grew at its fastest pace since May 2022. Housing was the weakest segment for a 15th straight month, and employment fell at its fastest pace since May 2020. Input costs still quickened at their fastest pace since April 2023 even as orders fell, so a higher headline hid weak demand.

1. Diffusion index: At country level for each question, add the share reporting higher activity to half the share reporting no change. For example, 20% higher, 50% unchanged and 30% lower gives 20 + 0.5 × 50 = 45.0.
2. Scale: Each index runs 0 to 100, with 50 meaning no change from the prior month.
3. Seasonal adjustment: Adjust each national index for normal seasonal patterns before combining them.
4. Eurozone aggregation: Weight national indices by construction value added, or each country's share of building output, not equally and not by firm count. For example, with weights 0.40, 0.30, 0.25 and 0.05, scores of 45.0, 43.0, 52.0 and 48.0 give 46.3, a contraction.
5. Headline: The headline is the Total Activity Index itself, not a blend of sub indices.