Monetary tightening sends construction growth into negative territory
In December 2022, construction production in the Euro Area fell by 1.3% compared to a year earlier, after growth of 1.6% revised upwards in the previous period. It was the first month of contraction since December 2021 and the strongest since August 2021, due to the decline in construction activity (-1.3% compared to 1.4% in November) and civil engineering works ( -1.5% compared to 2.4%). Among the major EA economies, construction activity decreased in Germany (-8.2% vs. -2.3%) and Spain (-6.3% vs. -6.9%), but increased in the countries Netherlands (4.9% vs. 6.6%) and in France (4.1% vs. 1.8%). On a month-to-month basis, output fell 2.5% in December, the highest figure since September 2020.
This is the effect of the ECB's restrictive monetary policy, with interest rates rising rapidly. The first of the industrial sectors to feel the effects of an increase in interest rates is precisely that which feeds on mortgages, ie real estate construction. It could have gone badly, and it has gone badly, and it will go even worse in the future.
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The article Monetary tightening sends construction growth negative comes from Scenari Economici .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/la-stretta-monetaria-manda-in-negativo-la-crescita-delle-costruzioni/ on Tue, 21 Feb 2023 07:00:27 +0000.