UK construction industry sees slowest growth since last June
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Britain's construction sector saw its smallest growth for six months in December due to curtailed housebuilding work. The eagerly-watched S&P Global UK Construction Purchasing Managers' Index (PMI) gave a reading of 53.3, down from 55.2 in November. This was the lowest score since June 2024 and below the 54.4 forecast by analysts, although any figure above the 50.0 threshold denotes expansion, while all numbers under indicate contraction.
Housebuilding levels shrank for the third successive month, with survey respondents blaming high borrowing costs, as well as weak demand and consumer confidence. Construction companies responded to the reduced volume of new orders by cutting their input buying for the first time in eight months.
Housing development activity has been subdued over the past three years due partly to borrowing costs rising sharply in response to higher interest rates. Weak market: Britain's construction sector had its smallest growth for six months in December. The Bank of England hiked the UK base rate on 14 consecutive occasions between late 2021 and mid-2023 to try and control soaring inflation.
While it has recently cut interest rates from 5.25 per cent to 4.75 per cent, mortgages remain much more expensive than they have been for several years. Residential work was the only construction sub-category in S&P's survey to see output fall in December, while commercial activity and civil engineering reported readings of 55.0 and 52.9, respectively.
