Financial News: UK Construction Sector Downturn Deepens

UK Construction Sector Downturn Deepens

12/04/2025 - 05:54:00 (RTTNews)

(RTTNews) - The UK construction sector contracted at the fastest pace since May 2020 as output decreased amid challenging market conditions, survey results from S&P Global showed on Thursday.

The construction Purchasing Managers' Index dropped to 39.4 in November from 44.1 in October. This was the lowest score since May 2020.

Housing activity, commercial construction and civil engineering all reported the fastest downturns in activity for five-and-a-half years. Respondents cited fragile market confidence, delays with the release of new projects and lack of incoming new work for the deterioration in activity.

New business fell at a rapid pace in November. The new order sub-index showed the fastest downturn in new work since early 2009. Companies commented on sales headwinds due to risk aversion among clients, worries about the UK economic outlook and elevated business uncertainty ahead of the Budget.

Employment decreased for the eleventh straight month in November. The fall suggested lack of new work and elevated wage pressures. The latest fall was the sharpest since August 2020.

By contrast, supplier performance improved solidly in November and to the greatest extent since June 2024. Overall buying activity fell at the steepest pace in five-and-a-half years.

Cost burdens increased at an accelerated pace in November but the speed of inflation remained well below the long-run survey average.

Expectations for the year-ahead remained the weakest since December 2022. Some firms commented on hopes of a rebound in general market conditions and support lower borrowing costs. Meanwhile, others cited cutbacks to clients' investment spending plans and concerns about economic prospects weighed on outlook.

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