{"id":832196,"date":"2025-03-07T08:11:51","date_gmt":"2025-03-07T14:11:51","guid":{"rendered":"https:\/\/newsycanuse.com\/index.php\/2025\/03\/07\/housing-and-civils-hit-hard-as-construction-activity-plummets\/"},"modified":"2025-03-07T08:11:51","modified_gmt":"2025-03-07T14:11:51","slug":"housing-and-civils-hit-hard-as-construction-activity-plummets","status":"publish","type":"post","link":"https:\/\/newsycanuse.com\/index.php\/2025\/03\/07\/housing-and-civils-hit-hard-as-construction-activity-plummets\/","title":{"rendered":"Housing and civils hit hard as construction activity plummets \u00a0"},"content":{"rendered":"
\n

A sharp downturn hit the UK construction sector in February with the lowest activity level since May 2020.<\/p>\n

The latest S&P Global UK Construction Purchasing Managers\u2019 Index (PMI) data, released this morning (6 March), showed an activity index of 44.6.<\/p>\n

This was down from the 48.1 recorded for January<\/a> and below the neutral 50 mark.<\/p>\n

S&P described \u201csteep declines\u201d in housing and civil engineering activity.<\/p>\n

Residential construction was the weakest-performing sector, with an index reading of 39.3 in February compared with 44.9 the month before.<\/p>\n

S&P said this was the fifth consecutive month of decline in this sector and the sharpest contraction since early 2009, excluding the Covid pandemic.<\/p>\n

Weak demand, elevated borrowing costs and a lack of new work to replace completed projects were the main factors behind the slump, according to the latest data.<\/p>\n

Civil engineering output also suffered a severe decline from 44.6 to 39.5 last month \u2013 the lowest level since October 2020.<\/p>\n

\u201cSharply declining order books rippled through the UK construction sector in February, leading to accelerated reductions in output volumes, employment and input buying,\u201d said Tim Moore, economics director at S&P Global Market Intelligence.<\/p>\n

But he added that commercial construction showed \u201ca degree of resilience\u201d with a reading of 49 versus 48.9 in January.<\/p>\n

New orders also fell at their fastest monthly rate since May 2020. The S&P report mentioned \u201cdelayed decision-making among clients, reflecting squeezed budgets and concerns about the economic outlook\u201d.<\/p>\n

Some firms also noted the impact of cutbacks to business investment spending plans.<\/p>\n

With demand deteriorating, construction firms also reduced staffing levels for the second consecutive month and the fastest rate since November 2020.<\/p>\n

Lower workforce numbers \u201calso led to the steepest fall in subcontractor usage since May 2020\u201d, said S&P.<\/p>\n

It added that cost inflation accelerated in February, reaching its highest level since March 2023.<\/p>\n

Almost two-fifths of firms reported higher input prices, citing rising costs for raw materials, energy, transport and wages. Only 3 per cent noted a reduction in prices.<\/p>\n

Weak demand conditions were attributed to entrenched caution among clients, subdued consumer confidence, and lacklustre economic performance.<\/p>\n

Some optimism remains despite the bleak headline data for February.<\/p>\n

S&P said that almost 40 per cent of surveyed firms expected an upturn in output in the year ahead, and only 17 per cent predicted a decline.<\/p>\n

\u201cHopes of an improvement in underlying market conditions and lower borrowing costs helped to support confidence,\u201d S&P added.<\/p>\n

Industry analysts reacted with concern to the latest data although they noted some reasons for optimism too.<\/p>\n

Huda As\u2019ad, Accenture UK\u2019s capital projects lead, said: \u201cUncertainty and delayed decision making on major projects are taking its toll on the construction sector.<\/p>\n

\u201cAs we witness another fall in construction output \u2013 with levels at a near five-year low \u2013 the combined pressures of slowing demand and supply chain struggles continue to pile pressure on the industry.\u201d<\/p>\n

Neil Morey, technical director at Egis subsidiary Thomas & Adamson, described a \u201cworsening picture\u201d for housebuilding and infrastructure in particular \u2013 both of them \u201ckey investment priorities for the government\u201d.<\/p>\n

Morey noted \u201ca strong pipeline of projects emerging throughout the year across various sectors during the first couple of months of 2025\u201d.<\/p>\n

But he concluded that the construction sector was feeling the impact of \u201cintensifying\u201d inflation, macroeconomic uncertainty and \u201cthe high cost of finance\u201d.<\/p>\n

Michael O\u2019Shea, construction partner at law firm Gowling WLG, pointed to lower order books and \u201cincreased cost pressures\u201d as two key reasons for February\u2019s PMI decrease.<\/p>\n

\u201cRecent economic uncertainty will have only added to the fall in activity with threats of tariffs from the US and a potential global trade war,\u201d he added.<\/p>\n

O\u2019Shea said he expected the government to introduce its Planning and Infrastructure Bill later in March.<\/p>\n

Combined with the updated National Policy Framework, this \u201coffers some hope on the horizon\u201d to accelerate the construction of new infrastructure and homes, he added.<\/p>\n<\/div>\n

Read More<\/a>
\n Ben Vogel<\/p>\n","protected":false},"excerpt":{"rendered":"

A sharp downturn hit the UK construction sector in February with the lowest activity level since May 2020. The latest S&P Global UK Construction Purchasing Managers\u2019 Index (PMI) data, released this morning (6 March), showed an activity index of 44.6. This was down from the 48.1 recorded for January and below the neutral 50 mark.<\/p>\n","protected":false},"author":1,"featured_media":832197,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[104325,22731],"tags":[],"class_list":{"0":"post-832196","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-civils","8":"category-housing"},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts\/832196","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/comments?post=832196"}],"version-history":[{"count":0,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts\/832196\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/media\/832197"}],"wp:attachment":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/media?parent=832196"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/categories?post=832196"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/tags?post=832196"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}