Construction sector dips again in second-worst month since 2020
An influential survey has suggested that builders are struggling to drum up enough new business.
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Your support makes all the difference.Builders in the UK had one of their worst months in more than three years in October even as cost pressures eased, according to new data from a monthly survey.
The S&P Global/CIPS construction purchasing managers’ index (PMI) scored 45.6 in October.
It was a small rise from the 45.0 points that the index scored in September, but it is the second-worst month for the sector since May 2020, in the early days of the pandemic lockdown.
Companies told the survey team they were not getting enough new work to replace the projects they had completed.
They said client confidence was “fragile”, according to the survey, and that higher borrowing costs were eating into their sales.
The pessimism in the sector comes despite costs falling at their fastest rate since August 2009.
High interest rates and low consumer demand for new homes continue to drag down the UK construction sector, with a lack of new tender opportunities and a cutback of existing projects being reported across the house building industry
Housebuilders were hit the worst last month, with the subsector scoring 38.5 on the index. They said weak demand caused work on residential construction projects to fall.
“October data highlighted another solid reduction in UK construction output as elevated borrowing costs and a wait-and-see approach to new projects weighed on activity,” said Tim Moore, economics director at S&P Global Market Intelligence.
“Housebuilding decreased for the 11th month running and once again saw a much steeper downturn than other parts of the construction sector.
“There were signs of stabilisation in the commercial building segment, however, with output falling only slightly since September.
“Total new work continued to fall more quickly than at any time since the initial pandemic lockdown period, which contributed to shrinking demand for construction products and materials during October.”
Dr John Glen, chief economist at the Chartered Institute of Procurement & Supply (CIPS), said: “High interest rates and low consumer demand for new homes continue to drag down the UK construction sector, with a lack of new tender opportunities and a cutback of existing projects being reported across the house building industry.”