Construction growth weaker

6 December 2022

The impact of the recent economic headwinds is shown in a survey which found UK construction companies signalling a renewed slowdown in business growth during November. 

The headline seasonally adjusted UK Construction Purchasing Managers’ Index survey findings compiled by S&P Global for the Chartered Institute of Procurement & Supply, which measures month-on-month changes in total industry activity, report that optimism is at its lowest for two-and-a-half years. 

Aside from the levels seen at the start of the pandemic, the degree of positive sentiment was the joint-weakest since December 2008, the report states. 

At 50.4 in November, the index registered above the 50.0 no-change mark for the third month running but was down from 53.2 in October. Commercial work was the only segment to register an overall rise in business activity in November (index at 51.1) while house building activity stalled (50.0).

Construction companies cited higher mortgage rates and falling consumer confidence as factors that had held back residential activity. 

However, an additional factor could be lengthening delivery lead times. Survey respondents suggested that transport and logistics delays had led to longer wait times for the receipt of construction products and materials. 

So once again, it has to be borne in mind that many factors are at play within the economic framework. Indeed, 29 per cent of the survey panel anticipates a rise in business activity in 12 months' time, while 26 per cent forecast a decline, so opinions and experiences will inevitably vary. 

Photo: Brett Jordan