UK construction activity shrinks at worst rate in over 5 years in July
The pace of decline in the UK’s construction sector unexpectedly sped up in July, survey results from S&P Global showed on Wednesday.
The UK construction purchasing managers’ index fell to 44.3 points in July from 48.8 in June, undershooting FXStreet-cited expectations of an uptick to 49.2 in July.
Falling further below the neutral 50-point mark separating growth from contraction, it indicates the pace of decline in the UK construction sector accelerated in July.
Total industry activity in the UK construction sector fell at the sharpest rate since May 2020, S&P Global Market Intelligence Principal Economist Joe Hayes noted.
He added: ‘Dissecting the latest contraction, we can see a fresh and sharp drop in residential building, as well as an accelerated fall in work carried out on civil engineering projects. Forward-looking indicators from the survey imply that UK constructors are preparing for challenging times ahead. They’re buying less materials and reducing the number of workers on the payroll. Expectations also continue to underwhelm, despite a modest pick-up in confidence from June’s two-and-a-half-year low.’
Hayes continued: ‘Anecdotally, companies reported a lack of tender opportunities and a hesitancy from customers to commit to projects. Broader themes of uncertainty, both domestically but also internationally, will do little to reignite investment appetites.’
S&P Global said that the downward trend in payroll numbers continued into July, extending the current period of falling employment to seven months.
The PMI features a panel of 150 construction firms in the UK, with responses collected between July 10 and 30.
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