Euro area’s construction output falls in January

Euro area’s construction sector figures also came in weak in the month of January. Production in the sector fell 2.2 percent sequentially, the most in a year, to the lowest level in a year, with sharp falls recorded in Germany and France, which saw output down 2.2 percent and 7.6 percent, respectively.

However, given the extreme softness in January, the level of construction output was still up a seemingly strong 3.8 percent year-on-year. However, looking through the volatility, growth in the sector on a three-month basis dropped to zero. Of course, swings in construction output throughout the winter months are usually marked not least due to the effect of weather.

“With fundamentals in the sector positive - benefiting from above-potential economic growth, steady credit growth, low interest rates and rising property prices - confidence last month only marginally down on January's eleven-year high, and order books also still in the best shape for about a decade, we expect to see a return to growth in the sector over the near term. And we expect the way to be led by Germany, where the fundamentals are most favourable”, noted Daiwa Capital Markets Research.

At 19:00 GMT the FxWirePro's Hourly Strength Index of Euro was bullish at 90.8014, while the FxWirePro's Hourly Strength Index of US Dollar was neutral at -34.9955. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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