Construction buyers report fastest downturn since 2020

The bellwether S&P International UK Building 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 a scarcity 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 analogous tempo to that seen within the earlier survey interval.

Building was hit by a double whammy of reducing new orders and delayed initiatives.

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

“Apart from the pandemic, complete trade 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 extensively cited a scarcity of recent work in the home constructing section, on account of mushy market circumstances and the affect of elevated borrowing prices.

“Building corporations stay optimistic total about their development prospects for the following 12 months, albeit much less so than on common in 2024 amid growing issues concerning the broader UK financial outlook. There have been additionally indicators that rising payroll prices and buying costs have change into a supply of tension, with the most recent enhance in total enterprise bills the steepest since March 2023.”