Financial News: UK Construction Activity Growth At 6-Month Low

UK Construction Activity Growth At 6-Month Low

01/07/2025 - 05:08:00 (RTTNews)

(RTTNews) - The UK construction sector growth softened to a six-month low in December as elevated borrowing cost and fragile consumer sentiment weighed on new orders, survey data from S&P Global showed on Tuesday.

The construction Purchasing Managers' Index registered 53.3 in December, up from 55.2 in November.

Although the score was the lowest in six months, the above crucial 50.0 value since March 2024 signaled a solid upturn in construction output.

Commercial activity was the fastest growing area in December, followed by civil engineering. Nonetheless, both categories showed slowdown in growth since November. On the other hand, residential work continued to report contraction in December.

The survey showed that total new work expanded at the slowest pace since last June as improving tender opportunities in the commercial building sector had been offset by cutbacks to residential development projects.

In tandem with falling orders, firms reduced their input buying in December. Purchasing activity declined for the first time in eight months. Suppliers' delivery times were broadly unchanged in December. The survey suggested a decrease in sub-contractor usage for the fourth time in the past five months. Meanwhile, rates charged by sub-contractors increased the most in 20 months.

Purchase prices increased at a stronger pace that was only slightly softer than November's one-and-a-half-year high. Firms held back staff hiring in order to curb rising cost.

Sentiment among contractors picked up sharply since November. But this was still much weaker than seen in the first half of 2024. Many firms reported worries about cutbacks to capital spending as well as gloomy projections for the economy.

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