Housebuilding in decline again as high borrowing costs hit demand
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Activity in Britain's housebuilding sector continued to fall last month, as high borrowing costs and weak consumer confidence weighed on demand. The closely watched S&P Global/CIPS UK Purchasing Managers' Index for the construction industry came in at 55.2 last month, up from October's 54.3.
While the construction industry picked up in November, growth was lopsided, amid weaker residential house-building which is sensitive to high interest rates. Robust demand for commercial and civil engineering projects offset the contraction in residential housebuilding.
Commercial construction activity expanded at the fastest pace since May 2022. Conversely, residential work declined at the steepest rate since June. Housebuilding firms said high borrowing costs and fragile consumer confidence were hitting demand. Data: Activity in Britain's housebuilding sector continued to fall last month, new data reveals.
Tim Moore, economics director at S&P Global Market Intelligence, said while the construction industry has avoided the slowdown seen elsewhere in the economy, the high cost of borrowing continued to hit new orders. Construction firms also grew less optimistic about their prospects in the upcoming year, with confidence at its lowest since October 2023.
'A loss of momentum for new work, alongside concerns about rising employment costs, resulted in weaker job creation and falling business optimism across the construction sector,' Moore added. The survey's measure of employment rose marginally but the rate of job creation slowed to a three-month low.
