Construction output declines for the eighth straight month in August: PMI – Mortgage Strategy

Data from the S&P Global UK Building PMI shows that construction production fell for the eighth consecutive month in August, due to a significant decrease in housing and civil engineering.

Meanwhile, the company’s business forecast for the next year is the least optimistic in more than two and a half years.

Tim Moore, Director of Global Market Intelligence Economics at Standard & Poor’s, said, “The increase in the broader outlook for the UK economy is also behind the frustrating outlook for the company.

The survey said August’s 44.3 scored 45.5 in overall industry activity, the lowest reading in more than five years. A mark above 50 indicates growth.

Housing jobs fell to 44.2, while civil engineering performed the worst at 38.1, with commercial activity in the region at its fastest pace since October 2020.

New orders across the industry fell in the eighth month of August, although the rate of decline dropped to the lowest mark since January.

“Construction companies have widely commented on the headwinds of challenging market conditions, intense price competition and the slow economic activity of the UK economy,” the study said.

The survey highlighted that business optimism across the construction sector has weakened.

About 34% of companies predict output will increase in the next year, while 22% predict a decrease. The lowest level of trust since December 2022.

Moore added: “All through youth, construction activity has been declining, the longest continuous recession since the beginning of 2020.

“August data show that in July, the rate of decline after output has only partially decreased in five years.

“The level of housing and civil engineering activities has dropped dramatically, again, which is the main reason for the weaker performance of the overall construction sector.”