UK February construction PMI 44.6 vs 49.5 expected

• Prior 48.1

Sharp declines in the housing and civil engineering categories weighed on overall construction activity on the month. That sees the headline reading slump to its lowest in nearly five years, tracking back to the Covid pandemic recovery. Of note, residential building activity fell for a fifth month running with the index sliding to 39.3. If you strip out the pandemic, the rate of decline was the fastest since early 2009. S&P Global notes that:

“Sharply declining order books rippled through the
UK construction sector in February, which led to
accelerated reductions in output volumes, employment
and input buying. Weak demand conditions were
attributed to entrenched caution among clients, against
a backdrop of subdued consumer confidence and
lacklustre economic performance.

“Aside from the pandemic, total industry activity
decreased at the steepest pace since December 2019.
This was led by considerable reductions in residential
building and civil engineering work, while a degree of
resilience was reported for commercial construction
activity. Survey respondents widely cited a lack of new
work in the house building segment, due to soft market
conditions and the impact of elevated borrowing costs.

“Construction companies remain optimistic overall
about their growth prospects for the next 12 months,
albeit less so than on average in 2024 amid increasing
concerns about the broader UK economic outlook. The
were also signs that rising payroll costs and purchasing
prices have become a source of anxiety, with the latest
increase in overall business expenses the steepest since
March 2023.”

This article was written by Justin Low at www.forexlive.com.