Construction sector shrinks at fastest pace since pandemic, survey suggests

"Activity in the UK's construction sector shrank last month at the fastest pace since the pandemic, partly due to uncertainty ahead of the Budget, a closely watched survey has indicated. The research from S&P Global said November saw the steepest fall in output for five-and-a-half years, led by a downturn in infrastructure and housebuilding. It added that commercial construction also faced "severe headwinds" last month as concerns over possible Budget measures "pushed clients to defer investment decisions"."

"S&P Global's Purchasing Managers' Index (PMI) for construction fell to 39.4 in November from 44.1 in October, where a score below 50 indicates the sector is contracting. It was the lowest score for the index since May 2020. "November data revealed a sharp retrenchment across the UK construction sector as weak client confidence and a shortfall of new project starts again weighed on activity," said Tim Moore, economics director at S&P Global Market Intelligence."

UK construction output fell sharply in November, recording the steepest decline in five-and-a-half years and the fastest pace of contraction since the pandemic. Infrastructure and housebuilding led the downturn, while commercial construction faced severe headwinds as concerns over possible Budget measures prompted clients to defer investment. The S&P Global construction PMI dropped to 39.4 from 44.1, the weakest reading since May 2020. Employment fell for an 11th consecutive month with the most marked job cuts since August 2020. Optimism hit its lowest since December 2022 amid cutbacks to client budgets and worries about long-term UK economic growth. The government target remains 1.5m homes by 2029.

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