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Investing.com -- UK construction activity plunged to its lowest level since May 2020 in November, with the S&P Global UK Construction PMI falling to 39.4 from 44.1 in October.
The construction sector has now experienced declining output for eleven consecutive months, with all three sub-sectors recording their fastest downturns in five-and-a-half years. Housing activity registered at 35.4, commercial construction at 43.8, and civil engineering at 30.0.
New business decreased rapidly in November, with 44% of survey respondents reporting a fall in new orders while only 17% noted an increase. This marked the fastest decline in new work outside of the pandemic since early 2009.
Construction companies cited several factors behind the downturn, including weak client confidence, delayed spending decisions linked to Budget uncertainty, and a general lack of new projects.
Employment in the sector fell for the eleventh straight month, with November seeing the steepest reduction in staffing levels since August 2020. Subcontractor usage has also declined every month since December 2024.
Supplier performance improved solidly in November to the greatest extent since June 2024, as softer demand eased supply chain pressures, though some firms still reported shipping delays. Purchasing activity dropped at the steepest pace in five-and-a-half years.
Cost burdens increased at an accelerated pace in November, though inflation remained below the long-run survey average. Companies reported higher prices for electrical components, copper products, and insulation.
Business optimism fell to its lowest level since December 2022, with 31% of construction companies expecting an upturn in activity over the next 12 months versus 25% forecasting a decline.
Tim Moore, Economics Director at S&P Global Market Intelligence, noted that "weak client confidence and a shortfall of new project starts" weighed on activity, with "steep falls in infrastructure and residential building work" leading the decline.