The UK construction sector suffered its worst downturn in November for five and a half years in the run-up to the Budget, according to a survey released on Thursday.
The S&P Global construction purchasing managers’ index slid to 39.4 from 44.1 in October. This marked the lowest level since May 2020 and was again below the 50.0 level that separates contraction from expansion.
New orders fell to the greatest extent since May 2020. S&P said many construction firms commented on weak client confidence, alongside delayed spending decisions ahead of the Budget.
Housing activity, commercial construction and civil engineering all experienced the fastest downturns in activity for five and a half years. Respondents pointed to fragile market confidence, delays with the release of new projects and a general lack of incoming new work.
Tim Moore, economics director at S&P Global Market Intelligence, said: “November data revealed a sharp retrenchment across the UK construction sector as weak client confidence and a shortfall of new project starts again weighed on activity.
“Total industry activity decreased to the greatest extent for five-and-a-half years, led by steep falls in infrastructure and residential building work. Commercial construction also faced severe headwinds during November as business uncertainty in the run up to the Budget pushed clients to defer investment decisions.
“Lower workloads, alongside pressure on margins from rising wages and purchasing costs, continued to dampen staff hiring in November. The latest round of job cuts was the most marked since August 2020.”
Moore said the degree of optimism dropped to its lowest since December 2022 amid reports of cutbacks to client budgets and pervasive worries about long-term UK economic growth prospects.
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