Connect with us

Economic

The construction sector in the eurozone has been hit by rising costs

Avatar

Published

on

The eurozone’s construction sector is suffering its worst decline since the pandemic brought the economy to a near halt in 2020, according to the latest closely watched monthly survey.

The bleak results underscore how rising borrowing costs, sharply rising raw material prices, and fears that a recession could accelerate the decline in real estate prices are all weighing on the European construction industry.

The S&P Global Eurozone Construction Purchasing Managers’ Index for December, released On Thursday, the overall activity index showed 42.6, down from 43.6 in November. Numbers below 50 indicate declining activity.

The data represents the eighth consecutive month of contraction in home construction. Activity fell in the largest economies of the 20-country bloc – Germany, France and Italy.

Advertisement

The figures, based on a survey of purchasing managers at 650 construction firms, are the latest sign of waning activity in European economies affected by the coronavirus. The war in Ukraine and the resulting rise in energy and other costs.

The construction sector ended 2022 on a “negative note,” said Laura Denman, an economist at S&P Global Market Intelligence, with a “sharp drop” in construction activity.

The final three months of 2022 mark the index’s worst quarterly performance since the April-June quarter of 2020, when construction activity was disrupted by pandemic.

Excluding Covid-19 lockdowns, total homebuilding activity fell at the highest rate since March 2013 and new orders for all construction projects fell at the fastest rate since September 2014, S&P said. The largest decline in both cases was in Germany.

She added that commercial buildings activity also declined for the ninth consecutive month, adding that the largest decline was in France.

Advertisement

“The December data indicates that companies expect continued challenging economic conditions into the future,” Denman said. She added, however, that there is “continued mitigation” in both cost and supply pressures.

Overall output in the construction sector in the eurozone has recently rebounded again above pre-pandemic levels, Height 2.2 percent in the year to October, according to figures from the European Union’s statistics agency.

But builders warn of its potential collapse and are calling for more government investment to make homes more energy efficient.

Tim-Oliver Müller, president of the German Building Industry Association, warned last month that many of its members were “struggling to survive due to high prices for building materials and energy”.

A recent study by the Ifo Institute in Munich found that 16.7 per cent of German builders experienced construction project cancellations in November, up from the usual rate of just 1 to 2 per cent. New home building orders in Germany fell 14 percent in October from a year earlier, according to the federal statistics agency.

Advertisement

Construction generates about 9 per cent of the eurozone’s output, so the fact that many construction firms are worried about declining activity and shrinking order books is a bad omen for the bloc’s overall economy, which is expected to suffer a mild recession this winter.

The construction sector is definitely among the most interest rate sensitive sectors, said Florian Hens, chief economist at Union Investment, a German fund manager, so if you raise prices, construction activity is expected to be affected early on, especially when raw materials inflation is still there. high.”

Source link

Advertisement
Continue Reading
Advertisement
Click to comment

Leave a Reply

Your email address will not be published.

Economic

Foreign policy experts say Russia is in danger of becoming a failed state

Avatar

Published

on

By

Nearly half of leading foreign policy experts believe Russia will become a failed state or disintegrate by 2033, while large majorities expect China to try to take Taiwan by force, according to a new survey by the Atlantic Council that points to a decade of global globalization. Coming troubles.

Forty-six percent of the 167 experts who responded to the think tank said Russia’s failure or disintegration could happen in the next 10 years. In a separate question, 40 percent indicated Russia as a country they expect to disintegrate due to reasons including “revolution, civil war, or political disintegration” during that time.

said Peter Engelke, deputy director for forecasting at the Atlantic Council, who helped design and interpret the survey.

Western officials say Russia has been greatly weakened by its action Ukraine invasion 11 months ago, including via sanctions and export controls. Economists believe that Russia’s productive capacity is steadily deteriorating as a result of punitive measures, setting the country back by decades.

Advertisement

Russian President Vladimir Putin has begun publicly acknowledging that Moscow faces setbacks in Ukraine and that the conflict will take a long time. The United States and its Western allies have pledged to support Ukraine for as long as they can, with all sides making plans to drag the war on for years.

Even as Europe is experiencing its biggest territorial conflict since World War II, the majority of experts surveyed said they did not think Russia and NATO would directly engage in military conflict in the next decade.

However, 70 percent of respondents predicted that Beijing would do so in the next ten years, backing up increasingly dire warnings by US officials that China would launch a military offensive to retake Taiwan.

US military leaders have pointed to 2027, the centenary of the founding of the Chinese People’s Liberation Army, as a possible invasion date. However, some officials have stepped up their warnings about Beijing’s intentions over the past year, and have said an invasion was possible before 2024.

US President Joe Biden has said repeatedly that Washington will defend Taiwan from Chinese attack, even as the US has historically tried to avoid articulating what it will do to deter both sides from acting.

Advertisement

Other findings add to the picture of global chaos. Nearly 90 percent of respondents believe that at least one additional country will have nuclear weapons by 2033. Sixty-eight percent of them said Iran would be most likely to obtain a nuclear weapon, coming as possibilities for reviving a nuclear deal between the six world powers and becoming Iran is increasingly bleak. Echoing some optimism, 58 percent of experts said they believed nuclear weapons would remain unused over the next 10 years.

Foreign policy experts also predicted a certain degree of American backtracking. While 71 percent of those surveyed expect the United States to continue to be the world’s dominant military power by 2033, only 31 percent believe the United States will be the number one diplomatic power and 33 percent the preeminent economic power.

Source link

Advertisement
Continue Reading

Economic

UN Secretary-General calls for ‘massive investment’ to help Pakistan recover. By Reuters

Avatar

Published

on

By

2/2

© Reuters. Pakistani Prime Minister Shehbaz Sharif and United Nations Secretary-General António Guterres gather on the day of the Summit on Climate Resilience in Pakistan, months after the country’s deadly floods, at the United Nations, in Geneva, Switzerland, Jan.

2/2

Written by Gabrielle Tetro-Farber, Emma Farge, and Asif Shahzad

GENEVA (Reuters) – United Nations Secretary-General Antonio Guterres on Monday called for massive support to help Pakistan with its $16 billion rebuilding effort in the wake of devastating floods, saying the country was a victim of climate chaos and the global financial system.

Officials from nearly 40 countries as well as private donors and international financial institutions are gathering for a meeting in Geneva as Islamabad seeks support in what is expected to be a major test case for who pays for climate disasters.

Last year’s floods due to monsoon rains and melting glaciers killed at least 1,700 people and displaced about 8 million. The water is still receding.

Advertisement

“We must match the heroic response of the people of Pakistan with our own efforts and massive investments to strengthen their communities for the future,” Guterres said in his opening remarks, describing the floods as a “climatic disaster of colossal scale.”

“Pakistan is a double victim of climate chaos and the morally bankrupt global financial system,” he added, calling for innovative ways for developing countries to obtain debt relief and financing.

Additional financing is critical for Pakistan amid growing concerns about its ability to pay for imports such as energy and food and to meet sovereign debt obligations abroad. Pakistan’s finance minister will meet a delegation from the International Monetary Fund on the sidelines of the Geneva meeting.

Pakistani Prime Minister Shehbaz Sharif has called for a new “coalition of the willing,” saying it needs $8 billion over the next three years. Islamabad will provide the rest.

“I am calling for a new lifeline for people who need to power our economy and return to the 21st century with a future protected from such severe risks to human security,” he told the meeting.

Advertisement

But big questions remain about where the remaining funding will come from, with less than half funding for the initial emergency phase of the disaster response, according to UN data.

Pakistan was at the forefront of efforts to set up a ‘loss and damage’ fund to cover climate-related damage at COP27 in Egypt, but it is not yet clear if it will qualify.

In a video message, French President Emmanuel Macron said Paris was ready to support Pakistan in talks with creditors and pledged $10 million in additional aid.

UNDP Administrator Achim Steiner said the next phase of Pakistan’s response represented “a monumental moment in the world’s reckoning”.

Source link

Advertisement

Continue Reading

Economic

European stocks rose on hopes of a slowdown in interest rate hikes

Avatar

Published

on

By

European stocks and US futures rose on Monday, as investors bet that cooling inflation on both sides of the Atlantic would allow central banks to slow the pace of interest rate hikes early this year.

The Stoxx Europe 600 regional index rose 0.4 percent, adding to last week’s gains of 4.2 percent, while the FTSE 100 index in London rose 0.2 percent.

Germany’s DAX rose 0.3 percent after output in the country’s manufacturing, energy and construction sectors increased 0.2 percent between October and November, according to figures from German statistics office Destatis.

Contracts tracking the blue-chip S&P 500 index on Wall Street rose 0.18 percent, and contracts tracking the tech-heavy Nasdaq 100 rose 0.3 percent before the New York open.

Advertisement

US stocks It rose sharply on Friday After US government data showed that average hourly wages of employees rose 4.6 percent year-on-year on a seasonally adjusted basis in December, compared to 4.8 percent in the previous month, easing upward pressure on inflation. The world’s largest economy added 223,000 jobs in the last month of 2022 – more than economists expected but less than the 256,000 job increase in November.

Mark Hefell, chief investment officer at UBS Global Wealth Management, said Fed officials may be “encouraged” by signs that wage growth is beginning to slow, though the job market remains too “tight” for the central bank. to stop interest rate hikes. Cycle.

The Fed last year raised interest rates from nearly zero to between 4.25 percent and 4.5 percent.

Markets are pricing in interest rates around 75 percent for the Fed to raise interest rates by a quarter of a percentage point when it meets at the end of January, with US inflation data released on Thursday expected to show rates rising 6.6 percent year-on-year. year in December, down from an increase of 7.1 percent in November. That would be the slowest pace since October 2021.

A measure of the dollar’s strength against a basket of six peers fell 0.35 percent on Monday. The currency has weakened more than 8 percent over the past three months as traders continue to bet that the Federal Reserve will raise interest rates at a slower rate in the first few months of 2023.

Advertisement

“The US economy remains resilient but on a downward trend,” said Florian Elbeaux, head of macro at Lombard Odier Asset Management. However, slowing inflation in Europe and China’s easing of strict zero-Covid policies meant that “for most risky asset classes, the trend has been the same – globally upward,” he added.

Eurozone inflation fell back to single digits in December, with data published late last week showing the core rate hitting 9.2 per cent after annualized price growth topped 10 per cent in the previous two months.

In Asia, Hong Kong’s Hang Seng rose 1.9 percent, and China’s CSI 300 index of Shanghai and Shenzhen-listed stocks rose 0.8 percent.

Source link

Advertisement
Continue Reading
Advertisement

Trending