The FINANCIAL -- Construction in the eurozone fell sharply in February, an indication that despite signs of an accelerating economic recovery, businesses and households are still wary of making new investments, according to Nasdaq.
The European Union's statistics agency said on April 20 that construction fell 1.8% from January and 3.7% from February 2014. That drop more than reversed a January rise, and followed a decline of 0.3% in the fourth quarter of last year.
The decline in construction is an indication that while the eurozone economy appears to have accelerated in the first quarter, it has yet to start firing on all cylinders.
Construction fell sharply in the wake of the 2008 financial crisis, reaching its low point in early 2013; it has since risen only modestly from that trough, and remains well below precrisis levels.
Investment spending more generally has been particularly weak in the eurozone since the financial crisis, held back by the government debt-and-banking crisis, and continued uncertainties about the future of the currency area.
To the surprise of many economists, investment spending did increase in the final three months of 2014, but the volatility of construction raises questions about the strength and durability of that pickup.
Germany is expected to lead the eurozone's pickup this year, but it was in the currency area's largest member that construction fell most sharply, down 3.1% on the month and 8.1% on the year.
A number of economists have urged the eurozone--and Germany in particular--to launch a major investment program to rehabilitate its dilapidated infrastructure.
European Union finance ministers last month gave the go ahead for the so-called Juncker Plan, a program of investments proposed by European Commission President Jean-Claude Juncker.
The program aims to mobilize EUR315 billion over four years for investment projects across the 28-member bloc, but only a small portion of that money will come from governments.