"While the December construction PMI has edged from November's five-and-a-half-year low, it remains firmly in contraction territory and still well below the all-important 50 mark. This is hardly surprising, as all the difficulties faced for much of 2025 are very much still present. The sector has struggled to gain momentum, with the PMI staying below 50 for the past twelve months, a marked contrast to September 2024 when it peaked at 57.2."
"This is heightened in December with very little money coming in for contractors, as there is minimal activity for nearly three weeks and poor weather can hinder the early stages of construction. For the housing market, the last quarter of the year tends to be a busy season as buyers look to be in new homes before Christmas. However, this year, the speculation and uncertainty surrounding a very late Budget meant that buyers were cautious about home purchases and completions underwhelmed."
"Although with interest rates falling and the Budget now settled, there is hope that the first quarter of the year will see increased activity. Yet, for those businesses surviving on razor-thin margins, the end of January traditionally spells real problems with reduced cash remittances from December activities combine with tax and other lumpy outgoings, meaning we could expect further administrations and restructurings."
December's construction PMI edged up from November's five-year-plus low but remained firmly in contraction below the 50 threshold. The PMI has stayed under 50 for twelve months, contrasting with a September 2024 peak of 57.2. December saw minimal cash inflows due to nearly three weeks of little activity and poor weather hindering early construction. Housing market completions were underwhelming amid speculation and uncertainty from a late Budget in a typically busy year-end. Falling interest rates and a settled Budget could lift activity in the first quarter, but tight margins and January cash demands risk further administrations. Government Infrastructure Strategy and office return trend support infrastructure and commercial prospects.
Read at London Business News | Londonlovesbusiness.com
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