Construction activity in the UK fell yet again in December last year, but happened to be the highest it has been over the last four months.
It is well to be noted that the latest S&P Global/CIPS UK Construction Purchasing Managers Index goes on to show a score of 46.8 when it comes to construction activity in December. Significantly, any score that is less than 50 in the seasonally adjusted tracker implies falling activity.
However, it remains noticeable that December’s score was high compared to the 45.5 score that got posted in November, which apparently happened to be the highest for four months.
Housebuilding went on to be the weakest-performing sector, with a score of 41.1, but its dip has eased to its slowest since July 2023.
Significantly, commercial construction depleted more modestly, with a score of 47.6, dipping by its fastest rate for three years.
Apart from this, the total new work lowered at its slowest pace since August last year. Subdued customer demand throughout the housebuilding sector was mostly cited as an element that led to decreased order books.
The updated index results, however, go on to suggest rising confidence in the sector.
Overall, 41% of the panel of almost 150 construction firms polled expects a rise in business activity in 2024, vis-Ã -vis 17% predicting a dip.
The finance director at contractor Beard Fraser Johns, in response to the latest figures, went on to say that the weak performance in the housebuilding sector goes on to hold back the output.
He added that a key driver has been elevated borrowing costs along with general uncertainty within the economy, which happens to be felt in the commercial space, thereby contributing to a decline that’s modest in the sector. It may very well be the case that clients do not happen to have the confidence as yet so as to commit to large-scale construction projects.
He further said that their view on the ground in the south goes on to remain positive with high demand, especially from frameworks, and elevating interest on the south coast as they prepare to open their latest regional office.
The head of cost management and commercial at Aecom, Brian Smith, added that the figures went on to show another month of dip for a sector that is indeed struggling for momentum, and the positive signs are at present pretty hard to come by.
Smith added that with a general election on the way, firms throughout the sector will be hopeful in terms of a wider economy gaining a fresh push. Although, for the time being, it is indeed critical that supply chains work in partnership so as to avoid the knock-on effects of single contractors facing challenges.
