- Prior 39.4
The decline in UK construction activity was less pronounced in December but it's still a terrible end to the year for the sector. There were sharp falls once again in housing, commercial and civil engineering activity as incoming new work remains subdued. Civil engineering (32.9) was the weakest-performing category of construction activity in December, and that is despite recording a softer rate of contraction than in November. Meanwhile, both housing activity (33.5) and commercial construction (42.0) decreased to the greatest extent since May 2020. Ouch.
The only positive footnote is that business activity expectations rebounded to five-month high. But that's about it.
S&P Global notes that:
"UK construction companies once again reported challenging business conditions and falling workloads in December, but the speed of the downturn moderated from the five-and-a-half-year record seen in November. Many firms cited subdued demand and fragile client confidence. Despite a lifting of Budget-related uncertainty, delayed spending decisions were still cited as contributing to weak sales pipelines at the close of the year.
"By sector, latest data indicated the fastest reductions in housing and commercial construction since May 2020, while civil engineering was the only segment to signal a slower pace of decline than in the previous month.
"Total new orders nonetheless decreased to a much lesser degree than in November, while business activity expectations for the year ahead rebounded to a fivemonth high. Some survey respondents attributed greater optimism to projections of rising infrastructure spending, especially in the utilities sector. There were also hopes that lower borrowing costs and easing inflationary pressures could boost demand across the construction sector.
"Supplier performance meanwhile improved for the fifth month running, largely due to lower input buying. This also contributed to a slowdown in purchasing price inflation to its weakest since October 2024."
