Construction buyers report fastest downturn since 2020

The bellwether S&P World UK Development Buying Managers’ Index fell to 44.6 in February from 48.1 in January – the bottom mark since Might 2020.

Residential constructing (index at 39.3) decreased for the fifth month in a row and was the weakest-performing space of development exercise in February.

Survey respondents cited weak demand circumstances, headwinds from elevated borrowing prices and an absence of recent work to switch accomplished initiatives.

Civil engineering exercise (39.5) additionally registered a steep decline in February. The respective seasonally adjusted index was the bottom since October 2020.

Industrial development (49.0) displayed a level of resilience, with output ranges falling solely marginally and at an identical tempo to that seen within the earlier survey interval.

Development was hit by a double whammy of lowering new orders and delayed initiatives.

Tim Moore, Economics Director at S&P World Market Intelligence, stated: “Sharply declining order books rippled by way of the UK development sector in February, which led to accelerated reductions in output volumes, employment and enter shopping for. Weak demand circumstances had been attributed to entrenched warning amongst purchasers, in opposition to a backdrop of subdued client confidence and lacklustre financial efficiency.

“Apart from the pandemic, complete business exercise decreased on the steepest tempo since December 2019. This was led by appreciable reductions in residential constructing and civil engineering work, whereas a level of resilience was reported for business development exercise. Survey respondents broadly cited an absence of recent work in the home constructing phase, as a consequence of comfortable market circumstances and the impression of elevated borrowing prices.

“Development corporations stay optimistic general about their progress prospects for the subsequent 12 months, albeit much less so than on common in 2024 amid growing considerations in regards to the broader UK financial outlook. There have been additionally indicators that rising payroll prices and buying costs have develop into a supply of hysteria, with the most recent enhance in general enterprise bills the steepest since March 2023.”