UKPMI
  • Prior 48.1

Sharp declines in the housing and civil engineering categories weighed on overall construction activity on the month. That sees the headline reading slump to its lowest in nearly five years, tracking back to the Covid pandemic recovery. Of note, residential building activity fell for a fifth month running with the index sliding to 39.3. If you strip out the pandemic, the rate of decline was the fastest since early 2009. S&P Global notes that:

"Sharply declining order books rippled through the UK construction sector in February, which led to accelerated reductions in output volumes, employment and input buying. Weak demand conditions were attributed to entrenched caution among clients, against a backdrop of subdued consumer confidence and lacklustre economic performance.

"Aside from the pandemic, total industry activity decreased at the steepest pace since December 2019. This was led by considerable reductions in residential building and civil engineering work, while a degree of resilience was reported for commercial construction activity. Survey respondents widely cited a lack of new work in the house building segment, due to soft market conditions and the impact of elevated borrowing costs.

"Construction companies remain optimistic overall about their growth prospects for the next 12 months, albeit less so than on average in 2024 amid increasing concerns about the broader UK economic outlook. The were also signs that rising payroll costs and purchasing prices have become a source of anxiety, with the latest increase in overall business expenses the steepest since March 2023."

Source: Forex Live