Economic Buzz: UK Construction Growth Falls To Three-Month Low

6 Dec 2022 , 04:01 PM

UK construction companies signalled a renewed slowdown in business activity growth during November, reflecting subdued demand and reduced risk appetite among clients. A number of survey respondents noted that higher borrowing costs and worries about the economic outlook had curtailed construction activity. At 50.4 in November, the headline seasonally adjusted S&P Global / CIPS UK Construction Purchasing Managers Index (PMI) – which measures month-on-month changes in total industry activity – registered above the 50.0 no-change mark for the third month running. However, the index was down from 53.2 in October and pointed to the weakest performance since August. Civil engineering activity (46.7) declined for the fifth consecutive month. November data pointed to modest increase in total new orders across the construction sector, which contrasted with a slight decline in October. Employment numbers continued to increase in November, but the rate of job creation eased to its slowest since February 2021. Construction companies suggested that concerns about rising costs and weaker growth had led to more cautious hiring policies. In contrast to the slowdown in staff recruitment, latest data signalled the fastest increase in input buying since July. Average cost burdens increased sharply in November, which was linked to rising energy prices, tight supply conditions and general inflationary pressures. However, the overall rate of input cost inflation eased to its least marked since January 2021, partly due to softer commodity prices. Powered by Commodity Insights